Apple Pear Industry - apal.org.auapal.org.au/wp-content/uploads/2014/10/Apple-and-pear-industry... · Research, Development & Extension Investment Plan 2010-2015 “Innovation making

Research, Development & Extension

Investment Plan

2010-2015

“Innovation making a difference”

Apple & Pear Industry

Prepared by DR Research & Consulting October 2010

Apple and Pear Industry RD&E Investment Plan 2010-2015 - “Innovation making a difference”

- 2 -

Apple and Pear Industry RD& E Investment Plan 2010-2015 – “Innovation making a difference” The information contained in this publication is intended for general use to assist public knowledge and discussion and to help improve the development of the apple and pear industry across Australia. You must not rely on any information contained in this publication without taking specialist advice relevant to your particular circumstances. Whilst reasonable care has been taken in preparing this publication to ensure that information is true and correct the Australian Apple & Pear Limited (APAL), Horticulture Australia Limited (HAL) and the Commonwealth of Australia give no assurance as to the accuracy of any information in this publication. APAL, HAL and the Commonwealth of Australia, the authors or contributors expressly disclaim, to the maximum extent permitted by law, all responsibility and liability to any person, arising directly or indirectly from any act or omission, or for any consequences of any such act or omission, made in reliance on the contents of this publication, whether or not caused by any negligence on the part of APAL, HAL and the Commonwealth of Australia, the authors or contributors. The Commonwealth of Australia does not necessarily endorse the views in this publication. This publication is copyright. Apart from any use as permitted under the Copyright Act 1968, all other rights are reserved. However, wide dissemination is encouraged. Requests and inquiries concerning reproduction and rights should be addressed to the HAL Publications Manager (+61 2 8295 2300). The Apple and Pear Industry Advisory Committee (IAC), APAL & HAL acknowledge the work of Dennis Richards (DR Research & Consulting) in leading the development of this plan. Also the valuable contributions of those people contacted (and cited in the plan) and the IAC’s R&D Sub-Committee are acknowledged. Electronically published in September 2010 by APAL http://www.apal.org.au/research-iac-research-priorities.cfm and HAL http://www.horticulture.com.au/industries/Apple_and_Pear/default.asp?src=side Contact Details: Brad Mills Horticulture Australia Limited Level 7, 179 Elizabeth Street, Sydney New South Wales 2000 Australia T: +61 3 9909 7542; M: 0408 635 465

E: [email protected]

Tony Russell Apple and Pear Australia Limited 39 O'Connell St, North Melbourne, Victoria 3051 Australia T: + 61 3 9329 3511

E: [email protected]

http://www.horticulture.com.au/industries/Apple_and_Pear/default.asp?src=side

mailto:[email protected]


- 3 -

Foreword

The Australian apple and pear industry, with an estimated gross value of production of $450 million, is the 3rd largest horticulture industry (after grapes & citrus). In world terms, however, the 2008 yield of 265,400 tonnes of apples represented just 0.8% of world production; and for pears 127,800 tonnes represented only 1.4% of world production.

Following an extensive consultation and data-gathering process a new strategic plan for the Australian apple and pear industry -New Horizons 2015- has recently been developed, endorsed and adopted. That plan highlighted the urgency for industry to accelerate change, respond to domestic and export market challenges and to improve industry communication and capability.

The present RD&E Investment Plan is devised in response to New Horizons 2015 and is more comprehensive than previous plans – in many ways a step-change to past approaches. Firstly, it is not an annual plan as before but embraces a period of five years (2010-2015). Secondly, it is much more strategic in nature encompassing seven RD&E programs identified as key investment areas. Thirdly, the portfolio has been devised to encompass much larger, better resourced and better integrated projects that are more tightly managed and monitored.

Overall the Plan outlines the RD&E outcomes that are required to meet the industry’s vision for 2015, namely: “The Australian apple and pear industry is world competitive; satisfying consumer demand for its products and with sustained profitability”.

In developing this Plan it is acknowledged that the partnership between the Australian Government, Horticulture Australia Limited, the Apple & Pear Industry (represented by Apple & Pear Australia Limited), research providers and co-investors is the essential component bringing together resources, expertise and a shared vision. The Plan provides guidance to existing and potential research providers and co-investors on our priorities and mechanisms to engage with the apple and pear industry.

The successful implementation of this plan requires a shared commitment in partnership to actively face and address the major challenges that lie ahead.

October 2010

Bob Granger Tony Russell Chairman General Manager Industry Advisory Committee Apple & Pear Australia Ltd


- 4 -

Table of Contents

1. Executive Summary ..................................................................................... 5

1.1 Setting the scene ...............................................................................................................5

1.2 Planning issues .................................................................................................................6

1.3 RD&E plan highlights .........................................................................................................6

1.4 Budgets and risks ............................................................................................................ 12

1.5 Overall performance ........................................................................................................ 12

2. The Australian Apple and Pear Industry - an Overview ............................. 13

2.1 Structure and production ................................................................................................. 13

2.2 Sales and markets - a domestic focus ............................................................................. 14

2.3 Trends, challenges and drivers ........................................................................................ 14

3. Apple and Pear Industry Strategic Plan - New Horizons 2015 ................... 16

3.1 Developing the plan ......................................................................................................... 16

3.3 Strategic plan highlights................................................................................................... 16

3.3 Strategic plan details concerning RD&E .......................................................................... 18

4. Key Stakeholders, their Strategic Plans & Co-investment ......................... 19

4.1 Partners’ strategic plans & objectives .............................................................................. 19

4.2 Overview of funding and priority setting ........................................................................... 22

5. The Development of the RD&E Investment Plan – Principles, Process & Priorities ......................................................................................................... 25

5.1 Why a five-year RD&E plan? ........................................................................................... 25

5.2 Guiding principles and issues .......................................................................................... 25

5.3 RD&E planning process ................................................................................................... 26

5.4 Re-defining priority areas ................................................................................................. 27

5.5 Overall performance ........................................................................................................ 28

6. The RD&E Portfolio – Priority Investment Areas ........................................ 29

6.1 Productivity & Supply Chain ............................................................................................ 29

6.2 Climate Change ............................................................................................................... 33

6.3 Germplasm Improvement ................................................................................................ 35

6.4 Market Access and Biosecurity ........................................................................................ 40

6.5 Market Research ............................................................................................................. 42

6.6 Industry Development ...................................................................................................... 45

6.7 Portfolio Management...................................................................................................... 51

7. Indicative Budgets and Risks ..................................................................... 53

7.1 Indicative budget and allocation targets ........................................................................... 53

7.2 On-going budgets ............................................................................................................ 55

7.3 Potential risks .................................................................................................................. 55

8. References................................................................................................. 57

8.1 Acronyms & abbreviations ............................................................................................... 57

8.2 Key documents ................................................................................................................ 58

8.3 Key contacts .................................................................................................................... 58


- 5 -

1. Executive Summary

1.1 Setting the scene

In March 2010, Apple & Pear Australia Limited (APAL) endorsed the apple and pear industry strategic plan called New Horizons 2015.

In developing the plan it was acknowledged that the Australian apple and pear industry is facing challenging times (see Section 2). The challenges, which are broadly-based across the production, supply and marketing chain, include the need to increase productivity to world-class levels, raise domestic consumption against competition (from other fruit products and from the imminent likelihood of foreign imports) and develop an export focus from a low and declining base.

The outline of the New Horizons 2015 plan to meet these challenges is summarised in Section 3 (FIGURE 1 shows diagrammatically the strategic plan on one page). The following three priority objectives, targets and approaches have been set:

1. stimulate domestic demand by 5 per cent through product quality and innovation by improving quality, increasing sustainable productivity and a transition to novel varieties

2. expand apple and pear export markets to 10 per cent of marketable product by 2015 by identifying overseas opportunities, making the right commercial liaisons and addressing market access issues

3. ensure industry has the resources and capability to achieve its primary objectives by improved motivation, communication and knowledge transfer to individual growers and the consequent development of leadership and skills competency

The business and operational activities of the apple and pear industry do not occur in isolation. It is recognised that substantial change can only occur with effective communication and collaboration with other parties such as industry associations, governments, growers and supply chain businesses, all acting collectively. In particular, RD&E, perhaps more than in any other activity, requires close collaboration and co-investment to be effective. Section 4 addresses the motivation and strategic directions of the key agencies that will continue to be funding partners and providers delivering RD&E outcomes. The key agencies are:

Horticulture Australia Limited (HAL)

Australian Government

government research providers from around Australia (collectively termed the National Horticultural Research Network, NHRN)

private sector & international research providers

Each of these major partners in the apple and pear RD&E portfolio has a commitment and role to invest in, sponsor or conduct research. A prerequisite for co-investment is a shared vision between collaborators. Therefore, when constructing the RD&E portfolio and its individual projects, the strategic objectives of all contributing parties must be addressed.

Of particular note in formulating the present RD&E plan, is the development of a national framework describing how NHRN intend to engage with APAL and HAL in negotiating and delivering RD&E services. It has been estimated that the overall co-investment of NHRN alongside (but not matched with) other funds represents in the order of 44% of total annual apple and pear RD&E spend. Under the new delivery framework NHRN has determined that the Department of Primary Industries Victoria will function as the formal point of contact with the apple and pear industry/APAL. The role, when fully operational, would include one of leadership and coordination across the entire network of RD&E provider agencies.

A key trend in the recent development of the apple and pear RD&E portfolio is the partnership of various international research providers; notably the New Zealand–based Plant & Food Research (PFR) who are major providers and voluntary contributors in two large projects. It is anticipated that the co-investment model of matching industry levies and/or voluntary contributions from other parties


- 6 -

with Australian Government funds, alongside non-matched NHRN funds, will continue to be the primary funding mechanism (see FIGURE 2, Section 4 for details).

1.2 Planning issues

In the past the R&D priorities for the apple and pear industry have been formulated and presented on a yearly basis. This approach has tended to reinforce a pragmatic decision-making approach, rather than a long-term, staged analysis to determine where investment is needed. In addition, short-term plans do not capture the changing trends and refocussing of partners’ and other stakeholders’ longer-term visions. Therefore, this present plan spans the five-year period 2010 to 2015. In addition, this plan is much more focused on industry development and extension activities as a driver of change; thus RD&E not R&D.

Analysis of past approaches in managing the RD&E portfolio has led to the identification of some guiding principles to help in the development and implementation of this five-year plan (Section 5). Broadly, these principles include:

the need for larger, integrated and pre-scoped projects allowing significant savings of resources and management time and appropriate planning with potential partners

broad agreement and effective engagement with stakeholders including the NHRN

restructuring the portfolio around priority investment areas aligned to New Horizons 2015

on-going assessment of performance and quality of individual projects, priority investment areas and of the RD&E plan itself

clarity of engagement through details set out in the plan, providing a “road-map” to potential partners/co-investors and emphasising the need to demonstrate benefits to industry

In undertaking the development of this new plan (see FIGURE 3, Section 5.3) three main sources of information, both from industry and partner agency sources, were analysed. They were: the past and current project portfolio; key strategic documents; and information derived from discussion with key contacts (see Section 8 for details). When compared with the objectives of New Horizons 2015, gaps and opportunities were identified. This analysis has resulted in the identification of several new or on-going large projects formulated into seven new priority investment areas: Productivity & Supply Chain Climate Change; Germplasm Improvement; Market Access & Biosecurity; Market Research; Industry Development; and Portfolio Management.

1.3 RD&E plan highlights

1.3.1 Productivity & Supply Chain (see Section 6.1)

In the past RD&E projects addressing productivity and supply chain issues have been undertaken as discrete units of study based on topics such as: agronomy, pest and diseases, post harvest , fruit quality etc. There is a compelling need to take an integrated systems approach when tackling RD&E in this area.

The whole-of-chain viewpoint is a major feature of New Horizons 2015 and the strategy for on-going RD&E in this area is to undertake an integrated systems approach in two broad areas.

Productivity, Irrigation, Pests & Soils (PIPS)

PIPS is a flagship project for the apple and pear industry. It has been able to successfully integrate RD&E effort both nationally and internationally, involving PFR, New Zealand researchers and project leaders. This amalgamation of expertise allows a multi-disciplinary approach to tackle the interacting factors associated with sustainable crop production.

For the period 2010-2015 it is envisaged that all on-going activities and any new initiatives concerning “orchard productivity” will be embedded in the PIPS program. It should be noted that PIPS is also the preferred project to embed all future work on pests & diseases.


- 7 -

At its onset in 2009, a number of missed and future opportunities were highlighted to be folded into the program. The activities planned to be brought on stream during 2010/15 include:

consolidating regional activities (including Queensland, Western Australia) and introducing new germplasm ( both apples and pears)

an additional focus on powdery mildew

inclusion of soil carbon amendment studies and fertigation

Sustainable Supply Chain Analysis

It is proposed to develop a multi-disciplinary RD&E project tentatively entitled “Tree to Table: Sustainable Supply Chain Analysis for Apples and Pears” (TTT) incorporating Value Chain Analysis and Life Cycle Analysis approaches. In addition, the project will utilise information and expertise already assembled in the projects on fruit quality and retail/consumer relationships presently underway or recently completed. TTT will be broad-reaching and augmented by other activities in tandem with the VCA theme.

The project will be commissioned by a call for “expressions-of-interest”. Under the auspices of HAL, the initial stage will be to devise and scope TTT with key participants to ensure that direct benefits to growers and the apple and pear industry at large.

It is envisaged that the process of project development will itself be a substantial activity requiring significant time and resources from potential partners and co-investors. However, ongoing activities from this large program are expected to generate a key understanding of the supply chain and help identify critical priorities for future RD&E investment.

Key performance indicators by 2015

The PIPS program has met all of its milestones, gained a high industry profile and has been re-contracted following a positive review

The TTT project has been commissioned and the majority of identified issues (see Section 6.1.3 for details) have been incorporated into, or addressed outside, the program

1.3.2 Climate Change (see Section 6.2)

Using the previously completed HAL and across-industry activities, and the “first steps desktop study” as a framework, it is proposed that on-going RD&E in this priority area will be enhanced and consolidated into a single project entitled “Responding to Climate Change; Beyond 2010” led by a dedicated project manager.

In formulating this consolidated program, the RD&E Sub-Committee and APAL will need to actively engage with the NHRN. In addition, the basic structure of a DAFF-sponsored Farmready project will be assimilated into a broader program.

The issue of carbon footprints (and water footprints) will be addressed as a component of the “Tree to Table: Sustainable Supply Chain Analysis for Apples and Pears” project utilising a Life Cycle Analysis approach. A study of carbon amendments into orchard soil, potentially utilising biochar and brown coal, is to be undertaken as a component of the PIPS project.


The majority of targeted growers (>75%) in all regional apple and pear growing districts have a good understanding of the likely impact of climate change on their production systems

Following a targeted survey, the apple and pear industry is viewed by Government and the community as proactive in exploring and addressing climate change issues


- 8 -

1.3.3 Germplasm Improvement (see Section 6.3)

The apple and pear industry has been, and will continue to be, a substantial investor in variety and rootstock improvement. The strategy taken by industry is to become a comprehensive player along the entire “development pipeline” and be actively involved in creating, facilitating and adopting new varieties. There are some very important issues to address in the on-going investment by the apple and pear industry in this germplasm improvement investment area. A major issue is that a number of projects undertaken by State Government agencies will not be on-going and industry must play a more active role in any continuing activities to retain and evaluate potential germplasm. Further, there is potential to integrate the apple and pear programs so that variety and rootstock development and field testing can be better co-ordinated and more efficiently planned. Finally, where the interests of the Australian apple and pear industry are implicated commercially-aligned participants are encouraged, where possible, to plan together.

The strategic requirement in the investment area of germplasm improvement is to better integrate activities into a coordinated apple and pear industry program. This will help provide critical mass and resources and impart strong commercial direction with improved decision-making. An ideal structure would involve a coordinated program overseen by a management team, formulated by representatives of the key stakeholder partners, and utilising a dedicated program manager to ensure the quality, coordination and delivery of agreed milestones.

The specific activities that need to be quickly resolved and/or rejuvenated include breeding activities (e.g. pear breeding in Victoria and apple breeding in Western Australia) and the on-going access and evaluation of germplasm (e.g. pears from Victoria, apple rootstocks from New South Wales and apple varieties from Queensland).

The role and integration of activities involved in the PrevarTM project, the Coregeo Australia project and the on-going APFIP project need to be actively considered in any overhaul or restructuring of the germplasm improvement priority area.

An interim activity is to establish a small implementation working group to analyse the scale, scope and best possible way of staging any integration of activities. This working group would deliver a plan agreed by all relevant stakeholders for implementation in November 2010 so as to coincide with the main funding cycle.


Pear breeding is an active part of the program

The fate of promising germplasm from previously supported breeding and selection programs undertaken by various State providers has been successfully negotiated

The majority of targeted growers (>75%) are satisfied with the approach and the level of investment into germplasm improvement

The level of investment and leverage is delivering the targeted outcome of introducing new varieties for industry-wide use

1.3.4 Market Access and Biosecurity (see Section 6.4)

The interaction and co-funding between industry, HAL, government and the RD&E community in the area of market access is notoriously complex and difficult to negotiate. Moreover, there are inevitable funding shortfalls that have a major impact on the maintenance of the appropriate skill base and infrastructure which frequently results in the need to refocus priorities.

Recent structural changes have occurred in an attempt to streamline the process of addressing market access issues with the creation of the Office of Horticultural Market Access (OHMA) by HAL in September 2009. Amongst other things, OHMA will coordinate a whole-of-industry research program based on “The Horticulture Market Access R&D Strategic Plan (2009-2014)”. The apple and pear


- 9 -

industry have an on-going generic investment in this broad-based program as a co-contributor. Importantly, it is OHMA that selects the individual projects that are undertaken at any given time, based on their adjudged priority. Specific issues likely to be of benefit to the apple and pear industry in the above program include: area wide management systems for Light Brown Apple Moth; cold disinfestation of fruit fly; data packages for cold tolerance of tropical fruit flies; replacement strategies for dimethoate and fenthion; and the preparation of a joint submission to Food Standards Australia & New Zealand (FSANZ) for approval to utilise irradiation as a phytosanitary measure.

Single-industry market access and biosecurity RD&E projects are not considered within the scope of the above market access plan. Rather they are considered separately on a needs basis by industry and HAL. Such projects may include those that are more oriented to specific growing regions/districts or to on-farm practices and may involve agencies such as Plant Health Australia (PHA) or the Cooperative Research Centre for National Plant Biosecurity (CRCNPA).

Currently APAL has commissioned a review by an independent technical advisor working in concert with OHMA to guide the future investment and priorities for the apple and pear industry in market access RD&E over the period 2010-2015. In addition, the review will help identify that part of the investment which is best served by an across-industry approach and that which is best undertaken directly as industry-specific projects.

Activities relating to on-farm biosecurity and risk management will increasingly be addressed as part of the industry development portfolio in an extension capacity (see Section 6.6.3). However, where more regionally-based biosecurity measures are concerned, it is anticipated that the development of risk management tools and training activities will be on-going throughout the five year life of this plan.


The apple and pear industry’s contribution to the across-industry program has been invested into priority areas and the RD&E is operational

Specific apple and pear industry projects have been identified and a planned program of investment is underway

Application of RD&E outputs has helped gain access to additional export markets

1.3.5 Market Research (see Section 6.5)

The challenges, objectives and action plans identified in New Horizons 2015 that address market research are numerous and specific. Clearly, there is a need to undertake a series of activities related to market research in both a domestic and an export setting.

New strategies and specific projects in these areas are being developed and co-ordinated separately (from this RD&E plan) through the Domestic Marketing Operational Plan and the Export Marketing Operational Plan.

However, the preferred approach is to undertake consumer market research activities in the context of supply chain studies; not in isolation. Consequently, in this RD&E plan, there is a proposal to embed some consumer research and the prospect of pilot-testing an “Aussie Apple” brand into the project tentatively entitled: “Tree to Table: Sustainable Supply Chain Analysis for Apples and Pears” (Section 6.1.3).


Through the implementation of the domestic market plan the key requirement and concerns of consumers have been identified

Consumer issues are being actively addressed in the relevant components and projects embedded within the RD&E plan

Export market analysis has helped identify and prioritise discrete RD&E projects or approaches to be undertaken in existing projects

RD&E outputs have assisted the Export Marketing Operational Plan achieve its objectives


- 10 -

1.3.6 Industry Development (see Section 6.6)

Industry development has been defined by HAL as “the process of informing and empowering those in horticulture to make better business decisions”. APAL has recently undertaken a comprehensive consultant-led study entitled “Apple and pear industry development needs analysis”. Overall, the study set a challenge for the apple and pear industry to better focus, integrate and re-invigorate efforts and processes in the area of industry development. Taking the above study into account, the new strategic approach during 2010-2015 will involve a number of complementary priorities.

New Extension Network

There is an urgent need to integrate activities across the different States and the various industry associations into a single network; all aligned to achieve the overall objectives of New Horizons 2015. This will involve three broad approaches, operating in parallel and under the auspices of a newly-constituted National Coordination Panel. The approaches involve: reconstituting existing extension projects and personnel; an engagement with private advisors; and the development of extension packages that are integrated into the overall RD&E portfolio.

People and Leadership Development

It is proposed to enhance people skills and leadership capacity by formulating a high profile project to encourage and support the participation of keen individuals. The proposal, led by APAL, will develop a three-tiered approach and, at each level, involve both an industry practitioner (selected from growers, supply chain operatives etc) and a RD&E practitioner (selected from science, technology, extension etc) as a pairing.

Future Orchards - Beyond 2012

The on-going strategy following a review of “Future Orchards 2012” is to upgrade, reformulate and relaunch the program as “Future Orchards - Beyond 2012” in late 2010. Any modifications or additions to the program will be formulated by the project management team and will ensure that the project remains high-profile and highly relevant to growers.

National Conference

Beginning in 2012 the strategy will be to invest in only one national conference held every two years. This event will focus on key elements of New Horizons 2015. It will provide the forum for addressing progress towards meeting the key objectives of industry’s strategic plans and embrace detailed reporting to industry in specific RD&E projects by key personnel. In addition, to complement the program the conference will present influential key note speakers from around the world and be a forum for individuals in the people and leadership development program to deliver their viewpoint.

It is anticipated that this national conference will be undertaken in partnership with a variety of other bodies where appropriate (e.g. AFFCO, State industry associations, and others). Participating groups will be able to secure their own dedicated sessions or “break-out” groups as needed.

Industry Data and Analysis

It is timely to restructure gathering, analysing and communicating data and information along the supply chain into a much more integrated, streamlined and effective program.

The strategy for the 2010-2015 period is to consolidate this work under the leadership of APAL staff into a single “Apple and pear industry Data and Analysis Program” (IDAP) that itself interacts with parallel programs under investigation in the domestic market and export market programs.

IDAP will bring diverse data sets together with appropriate analysis so as to provide information to individual growers on the one hand, and broad-spectrum users on the other, tailored to their different needs.


- 11 -

Industry Communications

The majority of apple and pear growers perceive the overall quality of APAL communications as “good” (Ipsos Australia, grower survey 2008). However, there are mixed reactions to the usefulness, quality and extent of the different communication methods utilised between APAL, the RD&E program and the industry at large. Projects such as “Future Orchards 2010” with dedicated built-in grower contact are receiving strong feedback with regard to the level of communications. The traditional methods of general information flow via magazines, articles and now the APAL web-site have variable support. The web-site in particular appears to have a very low profile with most growers even though grower-directed articles and information can be readily accessed from that site.

The Communications Strategy 2010/2015 (that is under parallel development to this RD&E plan) will refresh the approach to industry communications beginning with an immediate independent survey of growers throughout the industry. The intent of the survey is to assess the grower needs and satisfaction with the provision of industry services. Results from this analysis will then be used to adapt the channels and content of industry communications to fulfil expectations.


The majority (>75%) of targeted apple and pear growers should rate all industry development activities highly and positively when their feedback is sought or reviewed

An extension network should be active and broadly utilised

Future Orchards should have a comprehensive plan of its on-going role and of the next generation of activities and be undertaken with a high level of grower support and interaction

IDAP will be the mainstay of the apple and pear industry’s information sources and statistics

1.3.7 Portfolio Management (see Section 6.7)

The role of RD&E in New Horizons 2015 is considered critical in enabling industry to meet its existing and emerging challenges. In response, it is timely to re-analyse the approach taken to formulate and operate the apple and pear RD&E portfolio.

The principles and issues considered in re-focussing the RD&E program have been outlined in Section 5; broadly speaking they highlight the need for a more dynamic and comprehensive approach to managing the portfolio. The activities involved in the on-going management and formulation of the RD&E plan, like the projects within the portfolio themselves, need to be better integrated and more strategic.

The following activities, managed by the RD&E Sub-Committee, will be brought together in an integrated way: evaluation of project submissions; dedicated monitoring of individual projects; exploring and analysing partnering opportunities; pro-actively interacting with RD&E co-investors; program and project evaluation; and on-going priority setting.

Integration of these activities into a single project represents a step-change in the operations of the program and will require a significant additional body of work and commitment.


The operational aspects of planning, implementation and evaluation of the RD&E portfolio will be regarded as highly professional and understood by surveyed stakeholders

A suite of new projects will have been commissioned or developed under the guidelines and approaches outlined in this plan

The evaluation of performance of the overall RD&E plan will have been critically reviewed with a positive outcome; performance indicators for each investment priority area will be assessed in this review process

A new five year RD&E plan will be developed and approved based on the present plan and accommodating the review findings


- 12 -

1.4 Budgets and risks

The opening budget for 2010/11 is in the order of $6.4m as matched funds; equally divided between levy funds and voluntary contributions (Section 7). By far the biggest allocations are in the priority areas of Productivity & Supply Chain (representing 28% of the overall budget) and Germplasm Improvement (representing 37%). These high levels, in both cases, are largely due to the significantly high investment (as voluntary contributions) by New Zealand’s PFR in the new PIPS project (see Section 6.1) and the recent extension of the PrevarTM project (see Section 6.3).

A key feature of the starting budget is the high level of unallocated funds ($0.94m). These funds have been deliberately kept aside to await the development of this RD&E plan in order to better guide the on-going investment.

In the 2011/12 financial year it is anticipated that the overall available funds will increase to $6.8m due to a targeted increase in voluntary contributions despite a small reduction in levy funds.

Investment is targeted to increase in the following areas:

Productivity & Supply Chain area largely by expanding the PIPS project and by staging the introduction of a new supply chain study (see Section 6.1.3)

Climate Change with the onset of a new integrated project (Section 6.2.3)

Industry Development with a re-alignment and integration of industry development activities and the re-launch the Future Orchards Beyond 2012 (Section 6.6.3)

Portfolio Management by investment in the strategic analysis of a number of new projects areas (Section 6.7.3).

The large allocation into Germplasm Improvement will remain at about the same level as the previous year but a proportion of levy funds will be needed to accommodate transitional changes (Section 6.3.3).

The allocation of levy funds invested in Market Access & Biosecurity (Section 6.4.3) and Market Research (Section 6.5.3) is the same as the previous year.

The on-going allocation in subsequent years beyond 2012 is anticipated to remain in similar proportions to that in 2011/12.

There are some significant risks associated with the five-year deployment of this RD&E Investment Plan (Section 7.2). A reduction in the grower levy due to reduced domestic sales as a result of import competition is a real possibility. In addition, a current review by the Productivity Commission is, amongst other things, investigating the matching fund model and may lead to a change in Government funding policy.

Other more general risks relate to the uncertain profitability of undertaking significant export activity and the high cost and impact of extreme heat events, prolonged drought and the consequent price and availability of irrigation water.

1.5 Overall performance

The overall performance of this plan after the five year period will have been deemed successful if the following elements have all been achieved:

The individual RD& E projects have overwhelmingly achieved their objectives and produced their contracted outputs

Where appropriate the RD&E outputs have been transferred to, and utilised by, growers to improve their individual businesses; and

The majority of targeted growers (>75%) agree that over the five year period resources were invested appropriately into effective RD&E


- 13 -

2. The Australian Apple and Pear Industry - an Overview

2.1 Structure and production

The Australian apple and pear industry, with an estimated gross value of production of $450 million, is the 3rd largest horticulture industry (after grapes & citrus). In world terms, however, the 2008 yield of 265,400 tonnes of apples represented just 0.8% of world production; and for pears 127,800 tonnes represented only 1.4% of world production.

The deployment of the major apple and pear growing areas and their production (in descending order) are shown in the TABLE 1 (Source APAL). Notably, Victoria is by far the biggest producer; followed next by four States each producing around 10% of the total crop (namely, New South Wales, Western Australia, Queensland and Tasmania).

TABLE 1 - Australian and regional apple and pear production in 2008

State Main Growing

Region

Apple (t)

(% total)

Pear (t)

(% total)

Both (t)

(% total)

Victoria Goulburn Valley & Southern 104,000 (39%)

113,300 (89%)

217,300 (55%)

New South Wales Orange & Batlow 44,900 (17%)

550 (0.4%)

45,450 (12%)

Western Australia Donnybrook & Manjimup 31,500 (12%)

7,420 (6%)

38,920 (10%)

Queensland Stanthorpe 35,500 (13%)

650 (0.5%)

36,150 (9%)

Tasmania Huon Valley 30,200 (11%)

960 (0.8%)

31,160 (8%)

South Australia Adelaide Hills 19,300 (7%)

4,940 (4%)

24,140 (6%)

TOTAL 265,400 127,760 393,200

Productivity of Australian apple and pear orchards is not highly competitive in international terms. Australian apple orchard productivity of 15t/Ha lags well behind the world’s best such as New Zealand at 55t/Ha and Italy at 35t/Ha (World Apple Review, 2009). Australian pear orchard productivity of 25t/Ha also lags well behind the world’s better producers such as Chile at 44t/Ha and The Netherlands at 36t/Ha (World Pear Review, 2009).

Across Australia some 1100 businesses are involved in growing apples and pears. These growers are represented by Apple & Pear Australia Limited (APAL); their peak industry body. In addition, six State associations are members of APAL and play an active role in organization and issue management at the local and State levels. The Australian Fresh Fruit Company (AFFCO) is another important industry organization providing information and development services to a national network of growers.

APAL works closely with Horticulture Australia Limited (HAL), which is responsible for the investment of industry, levies for Research, Development & Extension (RD&E) and marketing (see Section 4.1.1 for details of HAL).

Australian apple and pear yields lag behind world leaders…..APAL


- 14 -

2.2 Sales and markets - a domestic focus

The apple and pear industry in Australia, unlike in many other producing countries, has a very strong domestic focus, low exports and minimal import competition.

2.2.1 Apples

Apples are among Australian consumers’ top three favourite fruits with an average of 78% of respondents to a regular industry survey having purchased apples in the past month. According to HAL, domestic consumption of fresh apples in 2007 stood at approximately 9kg per person per annum.

Major supermarkets and independent retailers are the main points of purchase for consumers of apples and pears, with food service businesses accounting for a much smaller component of supply.

In 2008 it was estimated that about 13% of the apple crop was used as concentrated apple juice, fresh apple juice or pie apple. Import competition is an important factor in the juice market; resulting in low prices attained by growers for fruit that is only suitable for processing. In 2008 only 1.3% of the fresh apple crop was exported overseas. No apple imports occur at present.

2.2.2 Pears

Unlike apples, pears do not occupy a position as a staple fresh fruit for Australian consumers; approximately 40% is sold fresh and the rest is destined for processing (canning).

The pear industry is subject to import competition from China, although the level of imports remains low. The industry was exporting approximately 4% of its pear production in 2008.

2.3 Trends, challenges and drivers

The Australian apple and pear industry is facing challenging times. While the industry is mature, relatively large in domestic terms and occupies established positions in domestic markets for fresh fruit, the continuation of this situation is under threat.

2.3.1 Influencing consumer demand

Comparison of fruit consumption per capita across the different countries of the world shows that Australians are not ardent consumers of apples. A summary of the estimated consumption for 2007 compiled in the “World Apple Review- 2008 Edition” is shown in TABLE 2.

TABLE 2 – Estimated apple consumption per capita in various countries in 2007

Europe (11 major

countries)

United Kingdom

New Zealand

Canada United States

Australia Average (32

countries)

Kg/head 16.7 10.1 14.6 12.6 7.5 7.4 10.3

Although it is acknowledged that these figures are estimates only (as it is difficult to access directly comparable data sets and accurate statistics across different countries) world apple consumption has been static for more than ten years and stimulating per capita consumption remains a global challenge.

HAL and Australian Bureau of Statistics (ABS) data for 2007 show Australian per capita consumption of apples at 9.99 kg/head and for pears 3.75 kg/head. Whatever the exact figures, it is clear from TABLE 2 that Australian consumption is on average lower than in many other countries (notably half of New Zealand’s in the above analysis) and below the average of all 32 countries studied.


- 15 -

Maintaining and growing consumer demand is essential for a mature industry that has a large, sunken investment. However, there is evidence that accompanying the low consumption base in world terms, the Australian apple consumer is not highly engaged and purchase is driven primarily by habit. In addition, there is a widespread perception that fruit quality is variable. On the supply side an emerging factor on the domestic apple market is oversupply.

Similarly, for pears, market evidence suggests that consumers are disengaged; with the fruit often forgotten, seen as boring or simply unripe and too difficult to handle and consume.

The challenge presented by competing fruits is also a serious factor. For example, the availability, presentation and quality of Australian summer-fruits, cherries, and mangoes are having an impact on apple and pear sales. Moreover, table grapes and cherries imported from California have made significant in-roads into the Australian retail market in recent years.

The apple and pear industry has recognised these various challenges and implemented tailored promotional programs in response. The most important factor will be to improve the quality of the product (as opposed to the promotion of it) to ensure the industry meets or exceeds consumer expectations. Continuing the shift to new varieties that interest the consumer and progressively reducing the supply of older varieties is also an important part of repositioning the product over time.

2.3.2 Threat of imports

The potential for apple imports is the key uncertainty facing the industry. While this has been a threat for many years, the almost unanimous expectation amongst key players in the industry is that apple import competition will become a reality within a year or two. In the absence of industry action to improve competitiveness, fresh apple imports have the potential to reduce Australian domestic market share by up to a third and the returns to the industry by up to 40%.

2.3.3 Lack of an export culture

The industry has only a minimal profile in export markets and lacks a committed export culture. Growers see their high labour costs to grow premium quality as their key disadvantage in that highly cost competitive market. Lately, high labour costs have been exacerbated by unfavourable $A-exchange rates.

In fact, despite the perceived imperative to export, the volume of Australian apple exports decreased from 36,700t in 2000 to 3,353t in 2008. Present Australian apple exports are limited to high value Pink Lady™ to the United Kingdom and commodity-style apples exported to some Asian markets.

In the same period pear exports declined from 19,908t to 5,157t.

2.3.4 Addressing the environment and sustainable production

As with all agricultural industries, the apple and pear industry is increasingly facing a number of environmental challenges.

Growers and consumers of food crops alike are progressively more compelled to be concerned about sustainable farm practices, particularly with regard to soil condition, water usage, pest management and chemical usage.

Moreover, climate variability, climate change and government policy measures in response to them will also influence the direction of the apple and pear industry. Environmental-, carbon- and water-friendly practices, both on-farm and along the supply change, will continually need to be adapted to meet increased consumer concerns.

Between 2000 and 2008 apple exports dropped

by 90% and pear exports by 75%…..APAL

Australian apple and pear consumers are disengaged and not

always satisfied…..HAL


- 16 -

3. Apple and Pear Industry Strategic Plan - New Horizons 2015

3.1 Developing the plan

In March 2010, APAL endorsed the apple and pear industry strategic plan called New Horizons 2015.

The purpose of developing the new industry strategic plan was to:

1. develop a shared understanding on the overall direction, key strategic issues and the critical actions required to influence the profitability, resilience and sustainability of the industry in the medium to long term

2. guide the investment of research, development and marketing funds provided by both apple and pear growers and the Australian Government from 2010 - 2015

3. enable allied service providers such as the public and commercial research and development community to align their resources and effort with that of the industry

4. demonstrate to consumers, customers, the community and government the positive actions the industry is taking in response to shifting demand and vigorous competition.

The process of developing the plan was guided by an APAL/HAL industry steering committee. Consultation with industry was comprehensive, involving regional focus groups as well as dialogue with individual industry participants along the supply chain.

Those priorities most likely to have an impact on the profitability and sustainability of the industry were rigorously tested using a needs analysis approach. In addition the Hi-Link Model (developed by the Centre for International Economics and used in the horticultural industry’s Future Focus program) was utilised to explore the sensitivities of different scenarios.

3.3 Strategic plan highlights

The Highlights of New Horizons 2015 are shown in FIGURE 1.

Analysis of the positioning of the apple and pear industry in the global market place highlighted that transformational change is needed. The imminent challenges facing industry are multi-faceted. They include: consumer dissatisfaction with fresh fruit; competition by other products or imports; the imminence of apple imports; and environmental impact pressures.

It was recognised that substantial change can only occur with effective communication and collaboration with other groups such as industry associations, governments, growers and supply chain businesses, all acting collectively.

The following three key areas for co-ordinated action have been identified in New Horizons 2015:

1. stimulate domestic demand by 5 per cent through product quality and innovation

2. expand apple and pear export markets to 10 per cent of marketable product by 2015

3. ensure industry has the resources and capability to achieve its primary objectives

The overall objective and vision of the 5-year plan is to deliver the apple and pear industry to a status of world competitiveness, profitability and sustainability by 2015.

Business as usual is not an option…..APAL

Chairman


- 17 -

FIGURE 1 - The apple and pear industry plan on one page - New Horizons 2015

Primary Objectives

Industry Strategic Intent

What: To consistently produce apples and pears of superior eating quality, focusing on varieties that are sought after by consumers in the domestic market and selected overseas markets where premium quality is valued

How: By industry and government stakeholders working collaboratively to reposition the apple and pear industry and transform

competitiveness by delivering valued services that support innovation

Consumer demand for Australian apples and pears is in decline.

Domestic competition from a variety of local and imported fruits has intensified.

Imported apple juice concentrate dominates the domestic market and limits the local market for lower quality fruit.

Competition from imported fresh apples is likely within the next year or two.

Apple and pear exports are declining rapidly.

Grower numbers and profitability are declining as costs rise and market share shrinks.

The industry could contract by 20-40 per cent within five years, even with a proactive industry response.

Climate change and environmental issues are placing pressure on sustainable farm practices and consumer-retailer perceptions

The Reality in 2010

The Australian apple and pear industry is world competitive; satisfying consumer demand for its

products and with sustained profitability

The Reality in 2015

1. Stimulate domestic demand by 5% through product quality and innovation 1.1 Improve consistency of product quality to match consumer expectations. 1.2 Enhance orchard productivity and management 1.3 Coordinate industry product promotion and marketing programs 1.4 Facilitate variety transition to match changing markets

1.5 Enhance industry value within the community

2. Expand apple and pear export markets to 10 per cent of marketable product exported by 2015 2.1 Define and understand overseas markets that offer profitable export opportunities 2.2 Develop collaborative approaches to enter and expand selected export markets 2.3 Resolve technical market access issues in target markets 2.4 Monitor export market competitor activities

3. Ensure industry has the resources and capability to achieve primary objectives 3.1 Adapt industry services to meet changing needs of growers 3.2 Improve quality and flows of information for decision-making across the supply chain

3.3 Invest in leadership and people development

Enabling Objective


- 18 -

3.3 Strategic plan details concerning RD&E

New Horizons 2015 identifies a suite of strategies and approaches to tackle the three key themes identified. Many of them concern product promotion and marketing activities which are outside the scope of this apple and pear RD&E plan. Similarly, those that involve industry in strictly business activities along the supply chain are not addressed further here. Yet another area involving general industry communication and interaction with government on policy and regulation are in the realm of activities conducted by APAL itself.

What is of concern here are those strategies and activities that can be addressed by a co-ordinated RD&E approach, which includes market research.

These three priority areas, transcribed in TABLE 3, have been adapted to highlight the RD&E approach that will be required to meet the performance target.

TABLE 3 – Key RD&E Priorities and targets of New Horizons 2015

Key Objective Main RD&E Strategy Target by 2015

1. Stimulate domestic demand Improve product quality, productivity and variety transition

Increase demand by 5%

2. Expand exports Understand target markets and resolve technical access barriers

Increase exports by 10%

3. Enhance Industry capability Adapt services to deliver quality information and promote leadership

Increased grower satisfaction

3.3.1 Priority 1 - Stimulate domestic demand

Given the almost complete reliance of the industry on domestic markets this priority is of paramount importance. The approaches needed to improve domestic demand broadly involve: improved and consistent quality; higher yet sustainable productivity; and introduction and transition to novel varieties. The need to assess and monitor consumer behaviour is also identified.

3.3.2 Priority 2 - Expand exports

The almost complete lack of an export culture in the Australian industry is a major barrier to the development of new opportunities beyond the domestic market. Movement along this front is considered particularly difficult as it requires operating under extremely competitive pricing. The approaches largely depend on identifying overseas opportunities, making the right commercial liaisons (both in Australia and overseas) and ensuring product quality and market access issues are addressed.

3.3.3 Priority 3 - Enhance industry capability

None of the RD&E approaches identified to enhance market penetration will succeed unless growers themselves can adapt and adopt the necessary practices and technologies. The challenge and objectives for this enabling priority involve improved motivation, communication and knowledge transfer to individual growers and the consequent development of leadership and skills competency.


- 19 -

4. Key Stakeholders, their Strategic Plans & Co-investment

4.1 Partners’ strategic plans & objectives

The business and operational activities of the apple and pear industry do not occur in isolation. Strong strategic alliances and partnerships exist along the entire production and marketing chain. RD&E, perhaps more than in any other activity, requires close collaboration and co-investment to be effective.

Key agencies that will continue to be partners with APAL in delivering its RD&E outcomes include:

Horticulture Australia Limited


government research providers from around Australia

private sector & international research providers

Each of these major funding partners in the apple and pear RD&E portfolio has a commitment and role to invest in, sponsor or conduct research. A prerequisite for co-investment is a shared vision between collaborators. Therefore, when constructing the RD&E portfolio and its individual projects, the strategic objectives of all contributing parties must be addressed.

4.1.1 Horticulture Australia Limited - Strategic highlights

Horticulture Australia Limited (HAL) is a not-for-profit, industry-owned company. Its major role is to manage the expenditure of levy funds collected by the Australian Government on behalf of horticulture industries. When expended on RD&E (but not marketing and promotion), these levied funds are matched by the Australian Government. HAL is responsible for all decisions relating to the expenditure of levy funds to the Department of Agriculture, Fisheries and Forestry’s (DAFF). Where it is deemed that appropriate benefits accrue to the general apple and pear industry, HAL is also responsible for investing Australian Government funds alongside private sector or overseas funds (as voluntary contributions; VCs).

As a general guide, the annual level of matched funds managed by HAL is expected to be in the order of $6m; $3m from levies and another $3m from VCs.

In HAL’s Draft Strategic Plan 2010-2015 the key strategic priorities, RD&E investment programs and outcomes over the next 5-year period are presented in TABLE 4.

TABLE 4 - HAL priorities, RD&E programs and outcomes

HAL Strategic Priority HAL Investment Program HAL Major Outcomes

Deliver new information & knowledge Best practice on-farm management

Natural resource management

Value chain efficiency

New product development Increased knowledge that enhances productivity, competitiveness and sustainability Enhance industry skills & capability

On-farm R&D extension

Investing in people

Targeted communications

Enhancing industry capability

Build consumer demand Domestic marketing program

International market access

Promote health and well-being

New product and market development

Increased demand for produce in both domestic and international markets

HAL will invest >$30m in the next 5 years into

apple and pear RD&E


- 20 -

4.1.2 Australian Government - Strategic highlights

The Australian Government’s support and encouragement for effective RD&E is largely delivered through two of its Departments:

The Department of Innovation, Industry, Science and Research (DIISR) which has developed its National Research Priorities (reviewed June 2009).

The Department of Agriculture, Fisheries and Forestry (DAFF) which has formulated its Rural Research and Development Priorities (2007) to be a guiding document up to 2017.

HAL has an obligatory reporting arrangement and accountability to DAFF with respect to its RD&E investment decisions.

The combined strategic priorities for RD&E for the Australian Government which are applicable to the period 2010-2015 are shown in TABLE 5. The Australian Government is increasingly seeking outcomes from its co-investments that demonstrably meet one or more of these priority objectives.

TABLE 5 – Australian Government RD&E priorities (2010-2015)

National RD&E Priorities

(DIISR)

Rural RD&E Priorities

(DAFF)

Promoting and Maintaining Good Health

Productivity and Adding Value Improve the productivity and profitability of existing industries and support the development of viable new industries.

Supply Chain and Markets Better understand and respond to domestic and international market and consumer requirements and improve the flow of such information through the whole supply chain, including to consumers.

An Environmentally Sustainable Australia

Natural Resource Management Support effective management of Australia’s natural resources to ensure primary industries are both economically and environmentally sustainable.

Climate Variability and Climate Change Build resilience to climate variability and adapt to and mitigate the effects of climate change.

Safeguarding Australia Biosecurity

Protect Australia’s community, primary industries and environment from biosecurity threats.

Frontier Technologies for Building and Transforming Australian Industries

Innovation Skills Improve the skills to under take research and apply its findings.

Technology Promote the development of new and existing technologies.

4.1.3 Government research providers - Strategic highlights

Government agencies from across Australia, which include various State and Territory Departments, Universities and CSIRO, have in the past been the main research providers and co-investors in the apple and pear RD&E portfolio. In addition, though to a much smaller extent, some collaboration and co-investment occur with other Government-backed agencies (e.g. ACIAR, RIRDC and DAFF).

In the time frame of this RD&E plan it is expected that the relationship with the major agencies will continue to a similar degree of commitment and resourcing. However, a major change in the way these partners engage with the apple and pear industry is at hand.

“Research & innovation are vital for Australia’s primary production &

food industries”… DAFF

http://www.innovation.gov.au/Section/AboutDIISR/FactSheets/Pages/NationalResearchPrioritiesFactSheet.aspx

http://www.daff.gov.au/_media/documents/ag-food/innovation2/Priorities_Booklet_FINAL.pdf


- 21 -

The major research provider agencies have for many years (since 2001) operated a formal network of senior horticultural RD&E managers together with representation from HAL. This National Horticultural Research Network (NHRN) was established to provide strategic leadership and a forum for consultation, communication and coordination across horticultural RD&E.

In 2007 the NHRN was commissioned on behalf of the Australian Government, represented by the Primary Industries Ministerial Council (PIMC) and its Primary Industries Standing Committee (PISC), to formulate a “National RD&E Framework for Horticulture”. The vision being to:

facilitate greater coordination and capability amongst Agencies and Industry

better harmonise RD&E and ensure effective collaboration without duplication

maximise the net benefit to Australia.

The process of developing the comprehensive framework was not completed until February 2010 and is not expected to be formally ratified by PISC and PIMC until September 2010.

The major outcome of the process has been the identification of the future strategic directions of individual agencies; their preferred science competencies and the scale of resource commitments for each Horticultural Industry/Commodity Grouping.

Based on 2008-09 figures, NHRN has estimated that the total annual investment in apple and pear RD&E was $10.015m; 53% funded by HAL/apple and pear industry and 44% by State Government agencies. Only 15% ($0.803m) of the funds went directly to support State agency RD&E; the rest ($4.529m) was invested to support the activities of APAL, grower groups and private sector parties.

The NHRN has qualified the individual agency roles, estimated 2008/09 investment in RD&E and discipline support area for the apple and pear industry (TABLE 6).

TABLE 6 – Role, past RD&E investment and preferred discipline area for State

agencies articulated in the “National RD&E Framework for Horticulture”

Strategic Role State Agency 2008-09 Investment Discipline Area

Major Priority Role

Department of Primary Industries Victoria (DPIV)

Agency $1.203m

HAL $0.312m

Other $0.139m

Plant Health

Crop Production

Environment

Support Role

Department of Agriculture and Food Western Australia (DAFWA)

Agency $1.402m

HAL $0.026m

Other $0.017m

Breeding

Queensland Department of Employment, Economic Development &

Innovation (QDEEDI)

Agency $0.442m

HAL $0.360m

Other $0.004m

Crop Production

Industry and Investment NSW (IINSW) Agency $0.729m

HAL $0.031m

Other $0m

Plant Health

Industry Development

Tasmanian Institute of Agricultural Research (TIAR)

Agency $0.543m

HAL $0m

Other $0.033m

Environment

Link Role

South Australian Research and Development Institute (SARDI)

Agency $0.063m

HAL $0

Other $0.108m

Extension

State agencies contribute ~44% of the

funds for apple and pear RD&E …..NHRN


- 22 -

The “Strategic Role” in the first column of TABLE 6 is defined as:

Major Priority Role: a national leadership and coordination role where there is a major priority for the relevant government agency which endeavours to give a high priority to funding research capability, including infrastructure, for that sector

Support Role: the agency undertakes research, but not leadership, in collaboration with and complementary to the major priority role

Link Role: the agency will undertake little or no research but access information and resources from other parties to meet industry needs and in support of other agencies

By the above definition and analysis, NHRN has determined that DPIV will function as the formal point of contact with the apple and pear industry/APAL. The role, when fully operational, would include one of leadership and coordination across the entire network of RD&E provider agencies.

4.1.4 Other RD&E providers - Strategic highlights

There has been substantial investment in RD&E with providers other than State Government agencies. NHRN has estimated that the annual investment by HAL/apple and pear industry in this sector is in the order of $4.3m per year. The majority of RD&E projects funded in this way are those involved in the area of industry development. Most are extensions of APAL roles to directly service industry with information, training and technology transfer. Another series of projects concerns high-order issues in horticulture that sensibly require a whole-of-industry approach with a contribution from the apple and pear industry (e.g. the “across-industry program”).

Notwithstanding the above, there remains a large proportion of RD&E investment and projects that are undertaken in collaboration with the private sector and international agencies. These RD&E providers are recruited to provide specialist skills, services and consultancies not usually available from the State Government research providers.

The motivation to engage overseas providers involves the need to recruit RD&E teams that are already experienced, with both infrastructure and technology available to have an immediate impact on the task at hand. In this respect, the apple and pear industry has, to date, a number of major projects underway with RD&E teams based in New Zealand, notably Plant & Food Research (PFR).

It is anticipated that the apple and pear RD&E portfolio will continue to tap into this external expertise with co-investment utilising the voluntary contribution funding mechanism (see Section 4.2.2). The documented prerequisites are that all such collaborations with overseas providers must be in partnership with the Australian apple and pear industry and be able to demonstrate a clear benefit, including transfer of technologies and/or “know-how”, to raise the capability of Australian users.

4.2 Overview of funding and priority setting

The process by which the apple and pear industry sets and funds its RD&E priorities through collaboration and co-investment with other parties is outlined in FIGURE 2.

4.2.1 Priority setting cycle

The priority setting cycle is outlined on the right-hand side of FIGURE 2.

The process is largely driven by the development of the apple and pear industry strategic plan under the auspices of the Industry Advisory Committee (IAC). The IAC is a committee of HAL that provides advice to the HAL Board; membership is recommended by APAL. The current apple and pear strategic plan, called New Horizons 2015, has been outlined in detail in the preceding Section 3.

As a consequence of the development of this strategic plan the IAC, through its various sub-committees, undertakes the development of a number of operational plans. In the past, one of these is

In 2010 three major projects are underway with NZ-based RD&E

providers…..APAL

http://www.horticulture.com.au/librarymanager/libs/142/Overseas_voluntary_contribution.pdf


- 23 -

the Annual Investment Plan which, amongst other things, outlines the RD&E priorities for submission to HAL and as a guide to potential research providers.

A major change to this process is indicated by the development of this present document. The apple and pear IAC has decided to release a five-year RD&E Investment Plan alongside, and underpinning, its strategic plan. This five year plan has been developed co-operatively with IAC, industry, HAL, APAL and key Government research providers (represented by NHRN).

An on-going function of the RD&E Sub-Committee of the IAC is to analyse and provide recommendations to HAL for the funding and implementation of individual projects that collectively make up the apple and pear RD&E portfolio.

The principles, issues and priorities guiding this process are the subject of Section 5; with specific priority investment areas detailed in Section 6.

4.2.2 Funding cycle & investment model

Co-investment by partners, such as those participating through the NHRN, together with industry and government (through HAL) is the key element in combining funds to effectively tackle priority RD&E. The process is outlined on the left-hand side of FIGURE 2.

FIGURE 2 - The funding and priority setting cycle for developing the RD&E project

portfolio

Matched funds

$


Government RD&E Providers

(NHRN)

Private Sector Providers

(participating as Voluntary

Contributors)


(DAFF)

Levy funds

Matched funds

Apple & Pear Growers

Priority RD&E projects

Outputs that benefit industry

FUNDS PRIORITIES

Advice & representation

Apple & Pear Australia

Limited (APAL)

Advice

Industry Advisory

Committee (& RD&E Sub-

Committee)


Government RD&E Providers

(NHRN)

Co-invested funds

RD&E Investment

Plan

Co-operative planning

DELIVERY

Industry Strategic Plan

(New Horizons)

$

$

$

Project development & agreement


- 24 -

4.2.3 HAL funding

The current funding model for investment in apple and pear RD&E is coordinated under the auspices of HAL. In general terms, industry or private sector funds can be matched (on an $A for $A basis) with Australian Government funds (via DAFF) for approved projects.

Projects funded through HAL always involve, at least in part, a combination of:

statutory levies (marketing and RD&E) from apple and pear industry levy payers. HAL is accountable to levy payers and to the Australian Government for the expenditure of levy funds. For detailed information see: “Investment of Levies for Australian Horticulture - Roles and Responsibilities”

voluntary contributions (VCs) received from private sector providers; including grower associations, commercial enterprises, overseas research providers and individuals

Australian Government matching funds for expenditure on RD&E up to 0.5 per cent of the gross value of production for the total horticulture industry.

Although industry levied funds and voluntary contributions can be matched with Australian Government funds, notably, funding from Government research providers (such as those represented by NHRN) cannot.

4.2.4 Co-investment from parties

Effective RD&E requires strong interaction and a shared vision with other parties. The nature of these alliances is largely determined by a process of co-investment in RD&E; each party combines resources and expertise in a mutually agreed project in order to gain leverage of their investment and to produce mutually beneficial outcomes.

Thus, in general terms, the decision to approve projects will involve a process that includes a judgment of “value for money”, funding leverage; benefit/cost and relevance to industry priorities. In this regard, most projects can usually nominate a significant resource co-invested from each of the parties.

Even though most projects tend to be structured with co-investment, many projects (or components of projects) are approved on a “fee-for-service” basis. The overriding judgment then is determined by the need for a timely specialised consultancy, skill or service.

4.2.5 Submission process

There are several opportunities, primarily advertised on the HAL website, to submit proposals based on published industry priorities in a standardised format for consideration. They include:

a general call for proposals that are seeking to be funded by VCs with matched co-investment through HAL - usually called in January each year, closing in March; but can be submitted at any time

an industry call for proposals involving apple and pear levies, with or without a VC component - usually called in October each year

commissioned projects specifically defined and competitively tendered at any time; on either a co-investment or a fee-for-service basis. HAL can accept registration for electronic notification.

Submitted applications are assessed for relevance and quality in a formal process undertaken by both the apple and pear Industry Advisory Committee (IAC) via its RD&E Sub-Committee and by HAL. Successful applicants are required to enter into a formal contract with HAL for delivery of project outputs based on mutually agreed milestone achievement.

More and more in formulating its apple and pear RD&E portfolio, IAC/HAL expects to call for expressions of interest and negotiate project briefs as part of a process to commission projects; rather than rely on scheduled calls for submissions. Direct contact with HAL or the IAC seeking guidance or assistance on any aspects of its RD&E portfolio is encouraged at any time.

http://www.horticulture.com.au/librarymanager/libs/142/Investment_of_Levies_For_Australian_horticulture.pdf

http://www.horticulture.com.au/librarymanager/libs/142/Investment_of_Levies_For_Australian_horticulture.pdf

http://www.horticulture.com.au/

http://www.horticulture.com.au/applying_for_funding/tenders.asp


- 25 -

5. The Development of the RD&E Investment Plan – Principles, Process & Priorities

5.1 Why a five-year RD&E plan?

In the past the R&D priorities for the apple and pear industry have been formulated and presented on a yearly basis. This approach has tended to reinforce a pragmatic decision-making approach, rather than a long-term, staged analysis to determine where investment is needed. In addition, short-term plans do not capture the changing trends and refocussing of partners’ and other stakeholders’ longer-term visions.

Another major change in the formulation of this plan is to focus much more on industry development and extension activities as a driver of change; thus RD&E not R&D.

This five-year RD&E Investment Plan is presented herein to:

1. underpin and provide an implementation strategy to achieve the objectives outlined in the apple and pear industry strategic plan New Horizons 2015

2. be complementary and compatible with the other apple and pear industry plans (Export Marketing and Domestic Marketing Plans, Industry Communication Strategy & APAL Annual Operating Plans)

3. provide a reference to industry’s priorities and guiding principles for all of those who wish to interact with the RD&E program, including research providers and other stakeholders (e.g. industry, HAL, private sector and government)

5.2 Guiding principles and issues

The following are a list of guiding principles that underpin the development of this plan.

5.2.1 Larger, integrated and pre-scoped projects the structure of the RD&E portfolio needs revision in order to reduce the

number of small projects and transform the portfolio to larger, more significant and better managed programs. In this way, significant savings of resources and management time can be redirected into more dynamic multi-disciplinary programs

it is anticipated that the process to achieve larger programs and fewer projects will involve preliminary pre-scoping of projects in partnership with potential collaborators. Thus, it is envisaged that a process of timely “commissioning” of projects will replace a routine annual “call” for projects. The PIPS project (see Section 6.1) provides a model

large projects and programs will, because of their complexity, require significant resource commitments at the scoping stage. Such projects will also require that appropriate resources and expertise for on-going management are identified and integrated into project delivery

Budget sufficiency and adequate allocation will be an important planning event

5.2.2 Broad agreement with stakeholders the delivery of effective RD&E requires strong partnerships and co-investment with other

agencies

when constructing the RD&E portfolio and its individual projects, the strategic objectives of all contributing parties must be addressed

the RD&E plan needs to be well developed with and broadly agreeable to key stakeholders prior to its implementation

the plan will need to be developed by a combination of preliminary discussions within the RD&E Sub-Committee then with a broader stakeholder group

Longer-term focus on RD& E; not just R&D


- 26 -

the plan must provide a “road-map” for agencies/partners to co-invest and be actively communicated and shared with them

the RD&E Sub-Committee will need to engage effectively with the National Horticultural Research Network (NHRN) with a view to brokering comprehensive projects

5.2.3 Restructured around priority areas the plan encompasses a very large investment that has already been made and involves many

on-going projects; the portfolio needs to be analysed and formulated into natural “groupings” that align with the strategic plan - New Horizons 2015

existing individual projects should be formally reviewed with the objective of ensuring they are on track and of sufficient quality; or whether they need to be adapted or even amalgamated with other projects

identification of “priority investment areas” for large strategic projects will be a key element in formulating the plan (detailed in Section 6)

a key element will be to identify those projects that are best delivered as “cross-industry” projects alongside other horticultural industry investors

5.2.4 Assessment of performance the overall RD&E plan, as well as the individual priority investment areas, will need to be

assessed; at the least when its term expires in 2015. This review process will help guide the development of on-going RD&E plans

all individual projects must be effectively reviewed during their lifetime

key projects (or sub-sets) should be subject to a comprehensive evaluation (as a separately funded & commissioned exercise)

the budget allocations to each priority area will need to be constantly monitored. Particular scrutiny of the balance between levy funds and voluntary contributions is envisaged to maintain an adequate and equitable level of investment

5.2.5 Clarity of engagement the RD&E program must be accessible to a broad range of investors but maintain a high level of

integrity and demonstrated benefit to industry

all projects must be contracted with transparent probity, high quality and stringent conditions related to performance and milestone achievement

technology transfer, adoption and industry development are the key elements required to be addressed in all project proposals

projects that are likely to involve commercialisation activities must contain a milestone where a commercialisation plan (including equity and route-to-market decisions) is agreed by co-investors

recruitment of, and investment from, international research providers should be encouraged provided there is direct and demonstrable benefit to the Australian industry

co-investment by, and contracting with, private companies as voluntary contributors must be able to demonstrate benefit to the wider Australian industry

projects involving APAL (and its subsidiaries) or HAL (and its affiliates) as the lead agency must follow the same principles as above.

5.3 RD&E planning process

The process of developing this RD&E Investment Plan is broadly outlined in FIGURE 3.

The first step involved an analysis of the recent and existing RD&E project portfolio against a background of key strategic documents and a broad cross-section of stakeholder views (see Section 8.1 & 8.2). Many stakeholders have recently undertaken their own far-reaching strategic analysis and developed contemporary plans that need to be embraced in the present plan.


- 27 -

The next step was to identify RD&E opportunities that would meet the objectives outlined in the apple and pear industry’s own strategic plan, New Horizons 2015, and also fit the guiding principles and issues outlined in Section 5.2 above.

This, in turn, has led to the identification and formulation of new investment priority areas with a collection of potential RD& E programs and embedded projects. The detailed description of these investment priority areas, which is the subject of the following Section 5.4 & Section 6, formed the basis of the initial draft RD&E Investment Plan. Subsequent discussion with stakeholders and industry participants has led to refinements allowing the finalisation of an agreed RD&E Investment Plan.

FIGURE 3 - The RD&E Investment planning process

5.4 Re-defining priority areas

In the past it was convenient to assign RD&E projects into “natural” groupings such as the current categories used by HAL, e.g. Crop Production; Post Harvest; Product Integrity; Environment; Market Development. However, the reality faced by horticultural industries is not always well reflected by this segmentation into individual disciplines or areas of interest. The challenges facing industry, outlined extensively in New Horizons 2015, involve a broader view of the production and supply process and the issues that impact upon it.

In this regard, a more holistic RD&E approach is needed to address on-farm, supply chain, environmental, market and industry development issues. Therefore, in this five year plan, projects have been formulated into seven RD&E investment priority areas (FIGURE 4; numbered according to the detail provided in Section 6).

Identify: Gaps

Opportunities Potential benefits

Formulate: Investment Priority Areas

Potential programs/projects Outputs

Finalise: Agreed RD&E Investment Plan

Compile: Draft RD&E Investment Plan

Test & Amend: Key internal & external stakeholders

Review: Key strategic documents

Analyse: Existing & recently

completed

RD&E projects

Filters: 1. Strategic Plan

2. Guiding principles

Consult: Key contacts (industry & partners)


- 28 -

FIGURE 4 - RD&E Priority Investment Areas

For each of these RD&E priority investment areas, the following Section 6 provides background analysis, an outline of current and recent projects, and an assessment of the strategic direction of investments that will help meet the objectives of New Horizons 2015.

Furthermore, for each priority RD&E investment area, the relevant objectives described in New Horizons 2015 (under their key headings and with the numbering use in the original document) are outlined in an accompanying BOX.

5.5 Overall performance

The overall performance of this plan after the five year period will have been deemed successful if the following elements have all been achieved:

The individual RD& E projects have overwhelmingly achieved their objectives and produced their contracted outputs

Where appropriate the RD&E outputs have been transferred to, and utilised by, growers to improve their individual businesses; and

The majority of targeted growers (>75%) agree that over the five year period resources were invested appropriately into effective RD&E

Apple & Pear RD&E

Portfolio

6.5 Market

Research

6.2 Climate

Change

6.3 Germplasm

Improvement

6.4 Market Access

& Biosecurity

6.1 Productivity

&

Supply Chain

6.6 Industry

Development

6.7 Portfolio

Management


- 29 -

6. The RD&E Portfolio – Priority Investment Areas

6.1 Productivity & Supply Chain

6.1.1 Background analysis

The supply chain is long; beginning with production in the orchard and ending with consumption by the end-user. The grower’s focus is mostly on sustainable productivity, whereas the major consumer concern is quality and value (with increasing interest in environmental integrity). In between these two extremes is a complex multi-participant storage, handling and distribution chain. This complex supply chain is prone to breakdowns in the flow of produce, materials, information and in business relationships.

In the past RD&E projects addressing productivity and supply chain issues have been undertaken as discrete units of study based on topics such as: agronomy, pest and diseases, post harvest, fruit quality etc.

There is a compelling need to take an integrated systems approach when tackling RD&E in this area.

6.1.2 Past and current projects

The recent and current RD&E portfolio encompasses ten different projects, in the following broad areas:

1. Productivity

- AP04009 Adoption of intensive pear production

- AP09031 PIPS Orchard Productivity Program

- AP08008 High density production systems for Australian-bred scab resistant apples

These three projects are already effectively being integrated into a single “Productivity, Irrigation, Pests & Soils” (PIPS) project. This integrated project is undoubtedly a significant, high-profile development for industry and a role model for how projects will be formulated in the future.

2. Fruit Quality

- AP08043 Through Chain Rot Management in Apples

- AP08036 Apple Consumer and Sensory Research for Improved Value Chain

- AP08004 Managing the risk of flesh browning for 'Cripps Pink' apples using a climate model

- AP09039 Delivery Developing ripening protocols for Ripe & Ready pears

These four projects, undertaken separately, examined different aspects of apple and pear fruit quality along the supply chain.

3. Retail/Consumer Interactions

- AP07010 AFFCO Well Informed Grower project - apples and pears

- AP07048 Assessment of bulk export shipments of Pink lady to UK

- MT10017 Driving Demand Growth through Understanding Consumer Purchase Behaviour (Retail Scan & Homescan Analysis)

The first two projects involves a consortium of growers (AFFCO) monitoring information and commodity flow along the supply chain, including engagement with the retail and export sectors. The third project is a continuing across-horticulture program investigating retail throughput and consumer buying patterns via direct scanning data or consumer focus groups.

6.1.3 New strategy 2010-2015 – Productivity & Supply Chain

The whole-of-chain viewpoint is a major feature of New Horizons 2015 and is the subject of four key priority areas (BOX 1).


- 30 -

The strategy for on-going RD&E in this area is to undertake an integrated systems approach in two broad areas.

Productivity, Irrigation, Pests & Soils (PIPS)

As indicated above, PIPS is a flagship project for the apple and pear industry. It has been able to successfully integrate RD&E effort both nationally and internationally, involving Plant & Food Research (PFR) researchers and project leaders. This amalgamation of expertise allows a multi-disciplinary approach to tackle the interacting factors associated with sustainable crop production.

In addition, the structure and operations of PIPS allows for a pro-active interaction with extension activities, particularly those associated with the on-going “Future Orchards 2012” program (see Section 6.6.3).

For the period 2010-2015 it is envisaged that all on-going activities and any new initiatives concerning “orchard productivity” will be embedded in the PIPS program.

At its onset in 2009, a number of missed and future opportunities were highlighted to be folded into the program. Some of these are considered a priority for implementation within the timeframe of this current RD&E Investment Plan. They include:

1. Consolidating regional activities and introducing new germplasm

i. Western Australian node of activity. A sub-project involving high density plantings of an agreed apple variety should be co-developed by DAFWA and the PIPS program leader incorporating the national objectives of PIPS.

ii. Integration of Queensland-based activities. The on-going activities and funding by QDEEDI associated with high density plantings of the putative scab-resistant cultivars will need to be adapted to the PIPS program (if necessary) and folded-in by 2012.

PIPS is an on-going flagship project for the

apple and pear industry

BOX 1

1.1 Improve consistency of product quality to match consumer expectations

1.1.1 Work collaboratively with retailers and the supply chain to identify and prioritise quality issues and implement improvement programs.

1.2 Enhance orchard productivity and management 1.2.2 Invest in national research and development that is regionally relevant and aimed at:

(i) improving the productivity of orchard production and the consistent supply of quality fruit to the supply chain;

(ii) minimising the impact of the industry on the environment. 1.2.3 Maintain research in biosecurity issues to minimise the impact of pests and disease

1.3 Coordinate industry product promotion and marketing programs 1.3.1 Establish and manage productive working relationships at the strategic level between major

retailers and the apple & pear industry. 1.3.3 Research and monitor changes in consumer attitudes towards Australian apples and pears

1.5 Enhance industry value within the community 1.5.1 Advance environmental sustainability and promote what the industry is doing and achieving

(ii) Complete an audit of the current and emerging key climate change, climate variability and other environmental issues related to apple and pear production and document

existing industry performance relative to competitors (ii) Formulate plans, targets and objective monitoring systems for issues that will provide

competitive advantage including residues, water efficiency and other environmental impacts (including carbon footprint).

(iii) Undertake environmental initiatives (on basis of audit and subsequent action plans) 1.5.2 Influence Government policy and regulation that impacts on industry competitiveness

(i) Prepare and release public reports that present quantitative evidence of industry performance on environmental issues


- 31 -

iii. Inclusion of pear plantings. It is essential that previous RD&E on intensive pear production is captured in the PIPS program. A study utilising high density plantings of a suitable pear cultivar needs to be embedded into the program in co-operation and with co-investment from DPIV. The study will focus on productivity and precocity.

2. Powdery Mildew

i. The validation of models to assist in the management of powdery mildew utilising a co-investment model with PFR in New Zealand and East Malling Research in the United Kingdom.

3. Soil, Water & Nutrients

i. Soil carbon amendments. A pilot study needs to be undertaken to investigate the effects of incorporation of carbon amendments into the soil profile. Possible materials to be studied include biochar and brown coal formulations. Such a study, brokered by the PIPS project, might incorporate co-investment from manufactures/dealers and involve co-funding from the energy industry sector and relevant Commonwealth and State Government agencies (e.g. IINSW, TIAR, and DPIV).

ii. Fertigation. Beginning in 2012/13 it is planned to include a “Precision Fertigation” module into the PIPS program. This activity will, for marginal cost, investigate the capacity to continuously supply nutrients in modern micro-irrigation systems to high-density apple and pear orchards. The aim would be to quickly integrate this activity into extension components and the “Future Orchards - Beyond 2012” program (see Section 6.6.3).

It should be noted that PIPS is the preferred project to embed all future work on pests & diseases. However, it is acknowledged that on occasion a pest or disease problem may arise that is sporadic or regional in nature. In that case, it may be expeditious to create a discrete project to address the issue.

A further area worthy of analysis and consideration for inclusion as part of a future Orchard Productivity program involves the issue of mechanisation. An NHRN driven and horticulture-wide project is presently investigating this discipline area (mechanisation, automation, robotics and remote sensing; MARRS).

Sustainable Supply Chain Analysis

As indicated above there is a need to take an integrated systems approach to analyse the supply chain in order to identify improvements that will benefit the apple and pear industry. A Value Chain Analysis (VCA) methodology is likely to prove useful in this regard (BOX 2).

Expertise to undertake a collaborative study utilising Value Chain Analysis and Life Cycle Analysis approaches is resident in Australia at TIAR, QDEEDI, PIRSA and in New Zealand at PFR. The TIAR team, who have a working relationship with an experienced UK group, have recently completed a VCA for the Australian vegetable industry.

It is proposed to develop a multi-disciplinary RD&E project based on the approaches described above. In addition, the project will utilise information and expertise already assembled in the projects on fruit quality and retail/consumer relationships presently underway or recently completed (described in Section 6.1.2). The project will be broad-reaching and augmented by other activities in tandem with

BOX 2

The concept of Value Chain Analysis as a business management tool was developed in the 1980s. In broad terms it is a systematic approach to enhance competitive advantage by examining the chain of activities that create and build value. Implementing a VCA study of a business is often accompanied by Life Cycle Analysis (LCA); the investigation and evaluation of the environmental impacts of a given product or service. This allows the identification and evaluation of the steps or processes along the chain that result in high emission of greenhouse gasses (e.g. CO2) or high use of other resources (e.g. H2O). A recent case study of South Australian wine was undertaken by Primary Industries and Resources, South Australia (PIRSA) with a world expert from University of Kent, UK leading the project. The study involved a combination of VCA, LCA and consumer research along the Yalumba “Oxford Landing” wine - Tesco, UK supermarket Supply Chain.


- 32 -

the VCA theme. In this way direct benefits to growers and the apple and pear industry at large are assured.

The working title of the project is tentatively: “Tree to Table: Sustainable Supply Chain Analysis for Apples and Pears” (TTT).

The project will be commissioned by a call for “expressions-of-interest”. Under the auspices of HAL/IAC, the initial stage will be to devise and scope TTT with key participants to embrace, in the best possible way, the following elements:

The project team should incorporate a network of members with a national and international reputation in this area of study

The RD&E partners would ideally also contribute as co-investors

Identify how existing or concluded projects already in the RD&E portfolio can complement this program

Equitably represent apples and pears with appropriate varieties

Address the total supply chain from the growers’ “Tree” to the consumers’ “Table”

Recruit growers to actively participate in the project and assist in the recruitment of key supply chain partners

Ensure that whilst maintaining appropriate confidentialities among supply chain participants industry at large gets real benefits

In addition to the domestic market, explore the prospect of including an export supply chain with the collaboration of AFFCO and its grower network

Utilise LCA to address the issues of carbon footprint and water footprint along the supply chain (utilising the PIPS project for the in-orchard analysis)

Identify the quantity and reasons for wastage at each point along the chain (focusing on fruit losses and postharvest attributes)

Expressly address consumer research (either using contemporary information or involving a study undertaken in parallel or integrated into TTT)

Explore the prospect of including an “Aussie Apple” brand into the study (in collaboration with HAL/APAL market research activities)

It is envisaged that the process of project development will itself be a substantial activity requiring significant time and resources from potential partners and co-investors. However, ongoing activities from this large program are expected to generate a key understanding of the supply chain and help identify critical priorities for future RD&E investment.

On-going aspects of both these key projects (PIPS and TTT) would be expected to help provide public information that would clearly demonstrate evidence of proactive industry involvement in ameliorating environment issues and addressing consumers’ needs.

For issues that strictly relate to Climate Change see the next section.

6.1.4 Key performance indicators – Productivity & Supply Chain

By the end of the 5 year period:

The PIPS program has met all of its milestones, gained a high industry profile and has been re-contracted following a positive review

The TTT project has been commissioned and the majority of issues listed above have been incorporated into, or addressed outside, the program

Develop a flagship supply chain project:

“Tree to Table”


- 33 -

6.2 Climate Change


According to CSIRO’s climate change website in the past century, the global average surface temperature has risen by 0.74 ºC. The observed increase in average temperatures is widespread around the globe, with rising trends recorded on all continents and in the oceans. In Australia:

there has been a 0.9 ºC warming since 1950;

snow depth at the start of October has declined 40 per cent in the last 40 years in the Australian Alps;

since 1900, precipitation has increased significantly over north-west Australia;

since 1950, eastern and south-western Australia have become significantly drier;

very long-term rainfall deficiencies have persisted across parts of southern and eastern Australia

The issues related to climate change are a high profile with the Australian Government and other agencies around the nation. Recognising that changes to Australia’s already variable climate will present great opportunities and challenges for the nation’s primary industries, a collaborat ive partnership called the National Climate Change Research Strategy for Primary Industries (CCRSPI) was established in 2007.

CCRSPI, operating under a mandate from the PIMC and PISC, is a partnership between State agencies, the Rural Research and Development Corporations (including HAL), DAFF and CSIRO. CCRSPI has a dedicated website. HAL’s funding contribution to CCRSPI is supported by an across-industry program through which the apple and pear industry has been, and will continue to be, an active contributor.

The first phase of work undertaken by CCRSPI has led to the identification of six priority RD&E areas for collaboration between industry and government. These are:

1. Understanding future climates - need for better information about future climate and climate variability at seasonal timescales;

2. Managing emissions - need for an understanding of primary production lifecycles and processes to reduce and offset emissions;

3. Preparing industries adaptation - need to adapt and respond to climate change to maintain productive, profitable and sustainable systems;

4. Accessing information - need for access to clear, relevant and factual information that is nationally consistent, but regionally and sectorally specific;

5. Facilitating change - through capacity and capability development; and

6. Linking decision makers - encouraging dialogue between researchers, policy makers and primary producers to align research priorities, policy development and industry responses

The second phase of CCRSPI activity aimed to develop an implementation plan for the research strategy for 2009/10 onwards. This, in turn, has led to the development of the “Horticulture Climate Change Action Plan” formulated by HAL in March 2009. The three basic elements of this plan and the questions that they are designed to answer are:

1. Adaptation - “Do horticulture producers (and their advisors) have appropriate tools and an understanding of climate change and variability issues, to avoid the risks and/or take advantage of the opportunities of a variable and changing climate?”

2. Mitigation - “Do we understand how to reduce greenhouse gas emissions from horticulture cropping systems?” and “Are current fertilizer management practices in horticulture appropriate for managing N2O emissions?”

3. Information, awareness and communication - “Do horticulture producers (and their advisors) have appropriate tools and an understanding of climate change and variability issues, to avoid the risks and/or take advantage of the opportunities of a variable and changing climate?”

Since 1950, Australia has warmed by 0.9 ºC

….CSIRO

http://www.csiro.au/science/Climate-Change.html

http://ccrspi.com.au/

http://www.horticulture.com.au/areas_of_Investment/Environment/Climate/climate_change_action_plan.asp?src=side

http://www.horticulture.com.au/areas_of_Investment/Environment/Climate/climate_change_action_plan.asp?src=side


- 34 -

6.2.2 Past and current projects To date, apple and pear industry investment in this area has been limited. Past or newly developed RD&E projects on climate change include:

1. Across-industry investment

- AH06019 Australian horticulture’s response to climate change and climate variability

- AH07027 Horticulture component of the National Climate Change Research Strategy for Primary Industries

- AH08003 Analysis of horticulture’s carbon footprint

- AH09014 Across-industry climate research, development and extension (RD&E) activities

- HG08037 Critical thresholds (‘tipping points’) and climate change impacts/adaptation in horticulture

- AH10003 Horticulture component of the National Climate Change Research Strategy for Primary Industries (pending)

These six projects represent the on-going apple and pear industry’s contribution to the across-horticulture activities that has led to the development of the HAL-compiled “Horticulture Climate Change Action Plan”. Moreover, one project has enabled a compilation of “Horticulture’s Climate RD&E matrix” capabilities; a database on climate change projects and activities undertaken by all stakeholders across Australia.

2. Specific apple and pear industry investment

- AP09019 First steps in a response to climate change and climate variability: desktop study

- Farmready - Adapting and adopting Best Management Practice relative to Climate Change in the Australian apple and pear industry

These projects address the specific needs of the apple and pear industry focussing on the regional impact of forecast climate change and the potential of implementing off-setting management practices. The first project above is nearing completion in June 2010. The second, a three-year project supported by funding from a DAFF Farmready Industry Grant Scheme, begins in June 2010.

6.2.3 New strategy 2010-2015 – Climate Change

In alignment with the above developments and plans, the action items shown in BOX 3 were identified in New Horizons 2015 as essential elements needed for the apple and pear industry to achieve progress on climate change and other environmental issues within the 2010-2015 period. It should be noted that some of these objectives (e.g. carbon footprint) have been addressed under the productivity and supply chain initiatives described in Section 6.1.3.

Using the above HAL and across-industry activities, and the “first steps desktop study” as a framework, it is proposed that on-going RD&E in this priority area will be enhanced and consolidated into a single project: “Responding to Climate Change; Beyond 2010”.

In formulating this consolidated program, the RD&E Sub-Committee and APAL will need to actively engage with the NHRN.

BOX 3 1.5 Enhance industry value within the community

1.5.1 Advance environmental sustainability and promote what the industry is doing and achieving (ii) Complete an audit of the current and emerging key climate change, climate variability

and other environmental issues related to apple and pear production and document existing industry performance relative to competitors

(ii) Formulate plans, targets and objective monitoring systems for issues that will provide competitive advantage including residues, water efficiency and other environmental

impacts (including carbon footprint). (iii) Undertake environmental initiatives (on basis of audit and subsequent action plans)

1.5.2 Influence Government policy and regulation that impacts on industry competitiveness (i) Prepare and release public reports that present quantitative evidence of industry

performance on environmental issues

http://www.horticulture.co.au/areas_of_Investment/Environment/Climate/climate_change_action_plan.asp?src=side

http://www.horticulture.co.au/areas_of_Investment/Environment/Climate/climate_change_action_plan.asp?src=side


- 35 -

The basic structure of the Farmready project will be assimilated into a broader program involving other stakeholders as co-investors. It is envisaged that a project brief will be compiled to interact with apple and pear industry activities known to be planned or underway by other agencies. One such activity “Management of extreme heat events in the pomefruit industry” is being undertaken by DPIV; another “Managing apple harvest maturity in a changing climate” has been proposed by IINSW with an embedded PhD student at the University of Sydney.

The consolidated “Responding to Climate Change; Beyond 2010” will have a dedicated project manager to coordinate the subprojects and ensure interaction with other projects in the apple and pear RD&E portfolio.

The issue of carbon footprints (and water footprints) is addressed earlier as a component of the “Tree to Table: Sustainable Supply Chain Analysis for Apples and Pears” (TTT) project utilising a Life Cycle Analysis approach along the Supply Chain (Section 6.1.3).

A study of carbon amendments into orchard soil, potentially utilising biochar and brown coal, is to be undertaken as a component of the “Productivity, Irrigation, Pests & Soils” (PIPS) project described earlier (Section 6.1.3).

6.2.4 Key performance indicators – Climate Change


The majority of targeted growers (>75%) in all regional apple and pear growing districts have a good understanding of the likely impact of climate change on their production systems

Following a targeted survey, the apple and pear industry is viewed by Government and the community as proactive in exploring and addressing climate change issues

6.3 Germplasm Improvement


A comprehensive analysis of germplasm improvement for the apple and pear industry was conducted in 2007 under the auspices of both HAL and APAL. The format of the analysis included workshops, discussion papers and a comprehensive study entitled “Options for Access to New Genetic Material for Australian Apple and Pear Growers – Business Case”. The overwhelming endorsement was the need to continue direct investment by industry in order to maximise its opportunities to compete domestically with imports and expand its export markets. Moreover, it was argued that this was the only option that would guarantee the industry access to new premium and niche varieties. Another outcome of the analysis was the need to integrate activities to provide better coordination, partnership and priority-setting and to gain access to new technologies. To date, apart from continued investment in the area, little further action has been taken on these insights.


The apple and pear industry has been, and will continue to be, a substantial investor in variety and rootstock improvement. The strategy taken by industry is to become a comprehensive player along the entire “development pipeline” and be actively involved in creating, facilitating and adopting new varieties.

This pipeline variously involves:

conventional breeding and selection, with some pre-breeding (enabling) technologies

examination of third-party varieties under commercial agreements

evaluation of varieties in Australian field conditions

Maintaining investment in variety development is fundamental to achieving

goals…APAL


- 36 -

evaluation and selection of suitable rootstocks

assessment of consumer-required attributes

postharvest performance and consumer testing

certification from various diseases

pre-commercialisation planning and, ultimately, commercial release.

To this end, APAL/HAL has invested not just in individual projects (with DAFWA, QDEEDI, DPIV & IINSW) but also as a major stakeholder in a joint venture (PrevarTM with Pipfruit New Zealand Inc and PFR) and as a sole stakeholder in other ventures (Australian Pome Fruit Improvement Program Ltd [APFIP] and Coregeo Australia).

Current investments in this area involve nine separate projects; viz.: - AP04004 Breeding woolly aphid resistant dwarfing apple rootstocks (IINSW) - AP08002 Pear variety evaluation & certification (APFIP) - AP08019 Breeding novel apple varieties to benefit the Australian Industry (DAFWA) - AP08041 Creating wealth…with consumer-preferred scab resistant apple selections (QDEEDI) - AP09026 Commercialisation of Pear varieties (Coregeo Australia) - AP09035 Development of new pome fruit products (PrevarTM) - AP09036 Perfect Pears - national pear Breeding Program (DPIV) - AP10016 Pear rootstock trial (APFIP) - AF10000 Australian pome fruit improvement program (APFIP)

There are some very important issues to address in the on-going investment by the apple and pear industry in this germplasm improvement investment area:

1. Some of these projects are nearing completion - With the exception of apple breeding with DAFWA (AP08019), those conventional breeding projects involving State Government agencies will not be continued (viz. AP04004, AP08041; AP09036). However, the investment to date by all parties is substantial and promising germplasm has been identified. It is therefore proposed that where possible on-going activities to further develop and evaluate potential germplasm will continue with apple and pear industry co-investment.

2. Apple and pear improvement currently operate independently - All of the disciplines, infrastructure and challenges in developing new germplasm are common for both apples and pears. There is a need to integrate these activities.

3. Variety evaluation is not well integrated with rootstock development – In the present activities and third-party interactions there is no need to integrate variety and rootstock evaluation. However, environmental and field evaluation will need to ensure that putative varieties are compatible with high production planting systems. The correct combination of scion and rootstock germplasm may be the key element in developing commercially successful releases.

4. Access to pre-breeding and genetic approaches is limited - To date all activities relating to molecular biotechnology are those designed to be used as breeding tools (such as marker-assisted selection). Dynamic on-going conventional breeding is likely to increasingly rely on embedded biotechnology approaches. Direct genetic modification (to produce GMOs) is presently considered outside the scope of the RD&E program; however, future investment in this area will be assessed from time to time.

5. Commercial considerations do not yet provide a strong feedback loop - Consumer and business feedback, acquisition to third-party germplasm and strategic planning for variety release are all considerations that will greatly influence priority-setting in the germplasm development pipeline. Breeding and selection activities must be integrated with commercial plans.

6. Commercially-aligned participants are not closely integrated - PrevarTM, APFIP and Coregeo Australia are all commercial businesses who are major participants in the RD&E portfolio. Each business has APAL as a key or sole investor and, therefore, represented on the various Boards of Management and Steering Committees. These businesses are the combined way in which the program interacts with external businesses (including apple and pear growers); in effect they negotiate the “route-to-market”. Inside the program they interact with the RD&E agencies (e.g. DFAWA, DPIV) in arranging for commercial release of new germplasm. It is essential that where the interests of the Australian apple and pear industry are implicated these businesses plan


- 37 -

together whilst at the same time being free to develop their own business approaches and strategies.

6.3.3 New strategy 2010-2015 - Germplasm Improvement

In New Horizons 2015 it is noted that the timely introduction of new varieties to meet changing consumer demands and provide novelty in the market-place has greatly benefited industry to date. The transition of Pink Lady TM to a major global variety is the exemplary case study.

Further, New Horizons 2015 identifies that one of the main strategies to stimulate domestic demand is variety improvement (BOX 4). The justification for placing germplasm improvement as a high priority is equally applicable for both apples and pears.

The strategic requirement of the apple and pear industry for 2010-2015 in the investment area of germplasm improvement is to integrate activities into a coordinated program. This will help provide critical mass and resources and impart strong commercial direction with improved decision-making. A promising strategy (exemplified by PIPS; see Section 6.1) involves bringing together all existing and new projects into a coordinated program. Such a proposal, termed “Apple and Pear Variety Improvement Program” (VIP), is outlined in BOX 5 and represented diagrammatically in FIGURE 5.

BOX 4

1.4 Facilitate variety transition

1.4.1 Maintain investment in a variety development program.

BOX 5

VIP - a proposed integrated approach to germplasm improvement (also see FIGURE 5) Structure The VIP program would be overseen by a management team, formulated by representatives of the key stakeholder partners, and charged with its strategic management and a dedicated budget. They would employ a program manager to ensure the quality, coordination and delivery of agreed milestones. The RD&E activities of each of the component apple and pear projects would operate in parallel and be led by individual project leaders reporting to the program manager. External interactions (see FIGURE 5 for details) will be essential to the successful operations of VIP. These interactions will need to be brokered by project staff and the program manager with endorsement from the management team. One key area of interaction will be between VIP and the APAL/HAL market research program to assess consumers’ needs and specifications. Integrated activities With the exit of DPIV as the pear breeding partner (including their on-going evaluation of germplasm) an alternative partner will need to be identified. Whether this breeding activity (i.e. continuation of AP09036) can be absorbed by existing participants (e.g. DAFWA), with appropriate resourcing, or can be contracted to a third-party needs immediate assessment by the VIP management team. The arrangement, including funding, for on-going evaluation of promising pear lines will be negotiated with DPIV and be included in the overall five-year budget for VIP. This activity would readily become an extension of the APFIP pear evaluation project (AP08002) which is presently scheduled to end in 2013 and with the pre-commercialisation activities for two potential pear varieties being developed by Coregeo, Australia (AP09026). Similarly, although QDEEDI will exit from apple breeding (AP08041) the on-going evaluation and pre-commercialisation steps for promising material needs to be negotiated with a view to embedding the activities and budget into VIP. Further, a satisfactory strategy to maintain a repository of the germplasm needs to be devised.


- 38 -

Without doubt the proposal outlined in BOX 5 is both ambitious and complex. The nature of individual projects, their contracted outputs and timeframes are not synchronized and the current stakeholders are at different stages of planning. Therefore, it is proposed as an interim action to establish a small implementation working group to analyse the scale, scope and best possible way of staging any integration of projects and activities. This working group would use the issues articulated above and the proposed VIP structure as a model for developing an action plan agreed by all relevant stakeholders. The plan would need to be ready for implementation in November 2010 so as to coincide with the main funding cycle.

6.3.4 Key performance indicators – Germplasm Improvement


Pear breeding is an active part of the program

The fate of promising germplasm from previously supported breeding and selection programs undertaken by various State providers has been successfully negotiated

The majority of targeted growers (>75%) are satisfied with the approach and the level of investment into germplasm improvement

The level of investment and leverage is delivering the targeted outcome of introducing new varieties for industry-wide use

BOX 5 (continued)

VIP- a proposed integrated approach to germplasm improvement On-going evaluation of elite apple rootstock material from IINSW’s woolly-aphid resistant program (AP04004) is necessary. It is proposed that the VIP management team analyse the need to embed this requirement alongside a comparative evaluation of a series of international rootstocks that show promise. The resultant RD&E project will be commissioned in 2011. The integration of any commercially-viable rootstocks into the existing APFIP multiplication program would be an obvious extension of these activities and those currently underway by APFIP for pear rootstocks in AP10016. Those on-going elements of the Australian National Apple Breeding Program (AP08019) at DAFWA that are supported by APAL/HAL will need to be integrated into VIP for commencement in 2012. Commercialisation issues All commercialisation activities will need to be overseen by the VIP management team. The PrevarTM project (AP09035) began in 2009 and will finish in early 2014. The Coregeo Australia project (AP09026) began in January 2010 and will also end in 2014. The APFIP project presently under development (AF10000) will commence in July 2010. These three activities represent the major co-ordinating component of this integrated VIP project and offers scope to re-investigate how APAL efficiently interacts with these businesses on behalf of industry. It is acknowledged that whilst the objective is for PrevarTM, Coregeo Australia and APFIP Ltd to work and plan together at the same time they are free to develop their own business approaches and strategies.


- 39 -

FIGURE 5 – Representation of the possible structure and activities of VIP, including interaction with external parties

Market Research

consumer patterns

market & sales trends(Australia & global)

(parallel APAL/HAL program)

Commercialisation

partners & alliances compatible with stakeholder network

markets & sales (Australia & global) undertaken by selected

businesses (e.g. nurserymen)

Apple and Pear VIP Management Team

Stakeholder reps: APAL, HAL, PrevarTM, APFIP, Coregeo, DAFWA, DPIV, QDEEDI &

selected others

Role: Strategic program management

Objective: Integrated development and introduction of new cultivars & rootstocks for

Australian growers

Germplasm Acquisition

Conventional breeding

Selection (cultivars & rootstocks)

Access to licensed varieties

Field Evaluation

productivity

regional performance

rootstock compatibility

Pre-commercialisation

variety characterisation/protection

certification of planting material

logistical bulk-up planning

route-to-market analysis

Apples Pears

Fruit Evaluation

quality, taste

postharvest performance

consumer testing

Program Manager

Delivery of milestones

Coordination of activities

Recruited by and reports to stakeholder Management Team

Integrated Project combining leadership & resources (from APAL/HAL and from co-investors) from a suite of Apple and Pear existing and newly-commissioned projects

External to Project; including business activities of Stakeholders

New Cultivars/Rootstocks 3rd Party germplasm owners

(pay a fee-for-service)

Projects to be integrated

AP04004 Breeding woolly aphid resistant dwarfing apple rootstocks (reformulated on-going activities) (IINSW)

AP08002 Pear variety evaluation & certification (APFIP)

AP08019 Breeding novel apple varieties to deliver benefit to the Australian Industry (DAFWA)

AP08041 Creating wealth...with consumer-preferred scab resistant apple selections (reformulated on-going activities) (QDEEDI)

AP09026 Commercialisation of Pear varieties (Coregeo)

AP09035 Development of new pome fruit products (PrevarTM)

AP09036 Perfect Pears- National Pear Breeding Program (reformulated on-going activities) (DPIV)

AP10016 Pear rootstock trial (APFIP)

AF10000 Australian Pome Fruit Improvement

Program (APFIP)

Field sites & expertise Contracted Growers

(receive a fee-for-service)

Pre-breeding Research

enabling tools/technologies

(contracted partners)

Apple and Pear Variety Improvement Program (VIP) 2010-2015

Plant Health

heat treatment/quarantine services (contracted partners)

Consumer evaluation

organoleptic assessment (contracted partners)


- 40 -

6.4 Market Access and Biosecurity


“Market access’’ and “biosecurity” are frequently used terms but often in a poorly defined way. The terms are usually used in reference to the adequate control of pests and diseases thus allowing the free movement and trade of fruit (and other commodities) across borders.

In the context of the apple and pear industry, the main market access concerns usually relate to facilitating exports to overseas markets; although there is also a component related to interstate trade. By contrast, sometimes the imminent importation of fruit into Australia is considered a market access issue (e.g. fireblight). The term “biosecurity” is usually used in the context of managing the risk of incursions or outbreaks of pests or diseases and may encompass activities related to prevention or amelioration.

The interaction and co-funding between industry, HAL, government and the RD&E community in the area of market access is notoriously complex and difficult to negotiate. Moreover, there are inevitable funding shortfalls that have a major impact on the maintenance of the appropriate skill base and infrastructure which frequently results in the need to refocus priorities.

Recent structural changes have occurred in an attempt to streamline this process of addressing market access issues.

The Office of Horticultural Market Access (OHMA) was established by HAL in September 2009, replacing the Horticultural Market Access Committee (HMAC), to drive the delivery of market access outcomes for industry via:

developing industry relationships in the target market

supporting and contributing to official negotiations

supporting and guiding market access R&D (viz. planning, fund negotiation, prioritising, monitoring and reporting)

The Office of Horticultural Market Access is funded from the across-industry program and multi-industry projects, using levy funds and matched funding from the Australian Government. The apple and pear industry have an on-going generic investment in market access as a whole-of-industry contributor. Based on “The Horticulture Market Access R&D Strategic Plan (2009-2014)” the investment is targeted broadly at:

“Systems Approaches” - regional and cross-regional activities focussed on pest data packages, pest free areas, area wide management and areas of low pest prevalence; and

“Postharvest Disinfestation” – including cold disinfestation and finding alternatives to dimethoate and fenthion

Single-industry (e.g. apple and pear) market access and biosecurity RD&E projects are not considered within the scope of the above market access plan. Rather they are considered separately on a needs basis by industry and HAL. Such projects may include those that are more oriented to specific growing regions/districts or to on-farm practices and may involve agencies such as Plant Health Australia (PHA) or the Cooperative Research Centre for National Plant Biosecurity (CRCNPA).


The area of market access and biosecurity has, in the past, represented a large proportion of the apple and pear industry’s RD&E investment. The recent and current RD&E portfolio encompasses more than twenty different projects in the following broad areas (although there is some cross-over when presented in this way):

1. Fruit fly management

- AP06006 Alternative fruit fly management for market access for apples

- HG06040 Optimal irradiation procedures for sterilization of Queensland fruit


- 41 -

- MT06025 Developing female lures for improved market access

- MT06041 Trapping to better predict and prove fruit fly presence

- MT08036 Ecology and pre-harvest control of fruit flies for systems approaches to market access for fruit fly host commodities

These five projects are all focussed on managing fruit fly “in the field” in order to control, minimise or prevent incursions and thereby optimise market access. The first three listed projects have been completed and the last two finish in early 2011 and 2012 respectively.

2. Export Market Access

- AP06047 Cold treatment of apples, pears and nashi against Q’fly for access to Taiwan

- AP07050 Improving shipment protocols to Japan

- MT07015 Tasmanian Pest Incursion Monitoring

- MT09021 Improving China Market Access for Australian horticultural products (pending)

- MT09073 Aus/China Market Access Seminar 2009

- AP07011 & AP10009 MRL risk analysis for major export markets of the pome fruit industry

These six unrelated projects address different issues that might impact on export market access. The last project, involving AFFCO, is on-going until June 2013 and involves collation of data with regard to pesticides and residue limits that may affect exports, particularly of Pink LadyTM to the UK and Europe.

3. Biosecurity and incursion protection

- AP06013 Enhanced specificity of fireblight diagnostics for improved incursion response

- AP07051 Identification of the transfer pathway for E. amylovora on fruit

- MT08044 Future Surveillance needs for bee biosecurity

- MT09026 Protecting pollination for the Australian horticultural industry Stage 2

- AP07024 Implementation of the Apple and Pear Industry Biosecurity Plan

- MT06032 Enhanced Biosecurity risk analysis tools

- AP08061 Technical response to Import Risk Assessment (IRA) for Chinese apples

This suite of projects was undertaken to address specific biosecurity issues that have arisen of recent years. The first two projects concern the issue of fireblight and the next two projects target bees as pollinators. The following two projects are broader in scope and address on-farm and regional plans to moderate or respond to invasive risk. The last project represents a technical response to a specific market import proposal.

4. Strategic Investment

- AH07002 HAL market access coordination

- AH07003 Market access support program

- MT09028 Strategic whole of industry approach to market access R&D - Stage One

The first two projects represent the apple and pear industry’s contribution to the resources, skills and infrastructure required to operate the market access program (through the outgoing HMAC) up to June 2009.

The last project listed above (MT09028) represents the apple and pear industry’s contribution to an across-horticulture project designed to begin the staged implementation of the current 2009-2014 Market Access R&D Plan. Importantly, it is OHMA that selects the individual projects that are undertaken at any given time based on their adjudged priority. However, in this time of transition accompanying the creation of OHMA, the selection and implementation of the appropriate RD&E portfolio has yet to be made. OHMA is currently investigating the need to re-establish a skills-based working group to help facilitate priority setting within this overall plan.

Specific issues likely to be of benefit to the apple and pear industry in the above program include: area wide management systems for Light Brown Apple Moth; cold disinfestation of fruit fly; data packages for cold tolerance of tropical fruit flies; replacement strategies for dimethoate and fenthion; and the preparation of a joint submission to Food Standards Australia & New Zealand (FSANZ) for approval to utilise irradiation as a phytosanitary measure.

OHMA will be setting a new strategic and

operational direction…..HAL


- 42 -

6.4.3 New strategy 2010-2015 – Market Access and Biosecurity

The action items shown in BOX 6 were identified in New Horizons 2015 as essential elements needed to achieve the dual goal of enhancing productivity and expanding export markets.

In 2009/2010 approximately eight diverse project proposals were received in this area of market access and biosecurity. All were put on hold for the time being until a review of this portfolio area has been undertaken. Currently APAL has commissioned a review by an independent technical advisor working in concert with OHMA to:

1. Collate the past and current (on-going) investments by the apple and pear industry

2. Summarise the current market access status of the industry

3. Identify the market access restrictions for potentially new export markets

4. Identify potential emerging market access restrictions for the existing markets

5. Using the above, undertake a needs analysis to determine the R&D priorities

The outcome of this review will be critical as a guide to the future investment and priorities for the apple and pear industry in market access RD&E over the period 2010-2015. In addition, the review will help identify that part of the investment which is best served by an across-industry approach and that which is best undertaken directly as industry-specific projects.

Activities relating to on-farm biosecurity and risk management will increasingly be addressed as part of the industry development portfolio in an extension capacity (see Section 6.6.3). However, where more regionally-based biosecurity measures are concerned, it is anticipated that the development of risk management tools and training activities will be on-going throughout the five year life of this plan. Both PHA and CRCNPA are potentially on-going RD&E partners in this area.

6.4.4 Key performance indicators – Market Access & Biosecurity


The apple and pear industry’s contribution to the across-industry program has been invested into priority areas and the RD&E is operational

Specific apple and pear industry projects have been identified and a planned program of investment is underway

Application of RD&E outputs has helped gain access to additional export markets

6.5 Market Research


Domestic Markets

According to ACNeilsen Homescan Australia, Australian consumers in 2009 reduced the number of shopping days for apples and their overall spend by about 5% compared with the previous year. This loss of customers could be traced to a switch to other fruit products (e.g. table grapes and cherries). The overriding reasons given by consumers for switching from apples was a combination of boredom

BOX 6 1.2 Enhance orchard productivity and management

1.2.3 Maintain research in biosecurity issues to minimise the impact of pests and disease 2.3 Resolve technical market access issue in target markets

2.3.1 Define technical and commercial market access issues in key export markets. 2.3.2 Support and participate in negotiations and invest in research as required to improve

market access for Australian apples and pears to target markets.


- 43 -

and perceived low quality. The effort to create a higher profile link with health benefits is making in-roads but is yet to have any perceived impact on buying patterns.

The situation for pears is similar but worse. The annual drop in domestic sales for pears in 2009 was 9%. Even though pears are bought by consumers infrequently they suffer from a certain disinterest as a fresh fruit and consumers need assistance when judging ripeness. Marketing attempts to overcome this image will focus on the versatility of pears as fresh food.

Export Markets

The apple and pear industry has only a minimal profile in export markets and lacks a committed export culture.

Australian apple exports fall into two classes: high value branded Pink Lady™ sent to the United Kingdom; and commodity style apples exported to India, Malaysia, Taiwan and Asian markets.

In recent years, largely due to competition on price and unfavourable exchange rates, the volume of Australian exports has significantly decreased; by 91% for apples and by 74% for pears (TABLE 7).

This small and declining export performance is a major strategic weakness facing the industry.

TABLE 7 – Australian exports of apples and pears in 2000 & 2008

Year Export Apples Export Pears

Tonnes % of Production

Tonnes % of Production

2000 36,700 ~8% 19,908 ~12%

2008 3,353 ~1% 5,517 ~4%

Decline % ~91% ~74%


The recent and current RD&E portfolio in the area of market research encompasses five projects, basically split between a domestic and an export focus. They are:

1. Domestic Market

- MT07065 Consumer tracking study

- MT10017 Driving Demand Growth through Understanding Consumer Purchase Behaviour (Retail Scan & Homescan Analysis)

These projects represent the on-going activities in tracing consumer behaviour, now largely focussed on obtaining ACNeilsen data from retail outlets and involving consumer focus groups.

2. Export Market

- AP07048 Assessment of bulk export shipments of Pink lady to UK

- AP09044 USA Import risk assessment for Apples

These projects represent discrete activities to explore export markets and identify aspects of the shipping process that affect fruit quality

3. Both Markets

- MT07036/08015 Whole-of-industry data collection export/import and domestic trade

This across-industry project involves the acquisition, analysis and reporting of horticulture industry import and export data and domestic market trade data. Quarterly reports typically include Australian export volumes versus imports across different trade partners. Domestic sales trends are displayed across retail and independent markets as well as providing consumer behaviour data on purchase frequency, volumes, value and market penetration.


- 44 -

6.5.3 New strategy 2010-2015 – Market Research

The challenges, objectives and action plans identified in New Horizons 2015 that address market research are numerous and specific (BOX 7). Clearly, in accordance with New Horizons 2015 there is a need to undertake a series of activities related to market research in both a domestic and an export setting.

New strategies and specific projects in these areas are being developed and co-ordinated separately from this RD&E plan through the Domestic Marketing Operational Plan and the Export Marketing Operational Plan.

However, the preferred approach is to undertake consumer market research activities in the context of supply chain studies; not in isolation. Consequently, in this RD&E plan, there is a proposal to embed some consumer research and the prospect of pilot-testing an “Aussie Apple” brand into the project tentatively entitled: “Tree to Table: Sustainable Supply Chain Analysis for Apples and Pears” (Section 6.1.3).

6.5.4 Key performance indicators – Market Research


Through the implementation of the domestic market plan the key requirement and concerns of consumers have been identified

Consumer issues are being actively addressed in the relevant components and projects embedded within the RD&E plan

Export market analysis has helped identify and prioritise discrete RD&E projects or approaches to be undertaken in existing projects

RD&E outputs have assisted the Export Marketing Operational Plan achieve its objectives

BOX 7

1.1 Improve consistency of product quality to match consumer expectations

1.1.2 Establish a baseline of consumer perceptions of the eating quality of Australian apples and pears and monitor changes.

1.3 Coordinate industry product promotion and marketing programs 1.3.3 Research and monitor changes in consumer attitudes towards Australian apples and pears

2.1 Define and understand overseas markets that offer profitable export opportunities 2.1.1 Engage with Australian apple and pear exporters to prioritise target markets, design and

conduct in-market research 2.1.2 Provide information and tools to enable growers to understand potential export

opportunities and identify pathways to participate 2.1 Develop collaborative approaches to enter and expand selected export markets

2.2.1 Engage with exporters to prepare marketing plans for apple and pears for each target markets

2.2.2 Work with the major Australian fruit exporters to develop and implement collaborative market initiatives for each of pears & apples

2.3 Resolve technical market access issue in target markets 2.3.1 Define technical and commercial market access issues in key export markets.

2.3.2 Support and participate in negotiations and invest in research as required to improve market access for Australian apples and pears to target markets.

2.4 Monitor export market competitor activities 2.4.1 Conduct in-market research and establish systems to understand and monitor key existing

and potential overseas competitors for the domestic or targeted export markets for apples and pears


- 45 -

6.6 Industry Development


Industry development has been defined by HAL as “the process of informing and empowering those in horticulture to make better business decisions”. Implicitly, it is a process of knowledge transfer to ensure adoption of RD&E at a practical level. Throughout this plan the term “extension” is used to denote this activity but it is acknowledged that the more contemporary term “practice change” is gaining currency.

As another component of its strategic planning, APAL has recently undertaken a comprehensive consultant-led study entitled “Apple and pear industry development needs analysis”. This key study (referred to hereafter as IDNA) analysed industry development activities in their widest context, including: dedicated extension and technology transfer projects and personnel; general grower interaction involving information transfer; and APAL leadership and communications.

Overall, the conclusions of the above IDNA study set a challenge for the apple and pear industry to better focus, integrate and re-invigorate efforts and processes in the area of industry development. With the exception of the “Future Orchards 2012” program, the overall benefits of other activities in this area were considered somewhat elusive.

The above study focussed in on four key recommendations:

1. Integrate and focus investment. Industry development investments should be an integrated program aligned with the industry’s strategic plan New Horizons 2015 rather than a series of loosely connected activities and success should be measured using performance indicators. This will involve appropriate re-allocation of resources.

2. Network with private advisors. The industry should facilitate under-utilised private advisors with the aim of creating a network which actively engages with growers through the RD&E program.

3. Ensure all RD&E projects in the portfolio contribute to industry development objectives. All projects seeking funding must demonstrate integration, avoid duplication and contribute to the industry’s overarching industry development goals. Existing projects should be reviewed to assist in and ensure their alignment to industry objectives.

4. Redesign and coordinate industry development initiatives. In line with the above, there is a need to restructure the way industry development services are formulated, managed and delivered through the establishment of a National Coordination Panel with broad stakeholder representation.


According to IDNA the industry in 2009/10 will invest about $1.3m into dedicated industry development initiatives (and more if embedded activities in individual RD&E projects are considered). It was estimated in IDNA that these projects represent about 16% of the overall annual RD&E budget.

The major single supplier of these industry-funded services is APAL itself (~42%). State-based grower organisations (in Queensland, Western Australia, Tasmania and Victoria) account for about 32% of the funding, largely through matching of voluntary contributions. The private consortium of growers and affiliates represented by the AFFCO is another major provider of industry development services utilising about 20% of available funds.

The recent and current RD&E portfolio encompasses in the order of twenty different projects, in the following broad areas:

dedicated technology transfer personnel (sometimes called Industry Development Officers)

people development

specific issue-based technology transfer/industry development projects

In 2009/10 16% of HAL funds were invested on industry development


- 46 -

conferences & industry communications

data collection and analysis

It should be noted that some of the more general industry development activities are funded under the umbrella APAL/HAL partnership and consultation agreements.

6.6.3 New strategy 2010-2015 - Industry Development

By far the greatest number of key and specific objectives highlighted in New Horizons 2015 is in this area of industry development (BOX 8).

BOX 8

1.2 Enhance orchard productivity and management

1.2.1 Evaluate next steps for Future Orchards 2012 and re-focus the program to accelerate adoption of high density orchard systems and broaden its scope to link information from the

supply chain including consumers.

1.2.4 Ensure the early adoption of new technology:

(i) Ensure adequate resources are applied to the extension of research and development programs

(ii) Educate suppliers with regard to benefits of adopting new technology/knowledge

1.4 Facilitate variety transition

1.4.2 Establish an industry knowledge base on annual production and the sales and pricing trends of each apple variety and provide access to growers.

1.5 Enhance industry value within the community

1.5.1 Advance environmental sustainability and promote what industry is doing and achieving (iii) Undertake environmental initiatives on basis of audit and subsequent action plans.

2.1 Define and understand overseas markets that offer profitable export opportunities

2.1.2 Provide information and tools to enable growers to understand potential export opportunities and identify pathways to participate.

2.1.1 Engage with Australian apple and pear exporters to prioritise target markets, design and conduct in-market research

2.2 Develop collaborative approaches to enter and expand selected export markets

2.2.1 Engage with exporters to prepare marketing plans for apples and for pears for each target market.

2.2.2 Work with major Australian fruit exporters to develop and implement collaborative market initiatives for each of pears and apples.

3.1 Match service delivery to changing grower and industry requirements through evolving national industry association structure and streamlining activities and programs

3.1.1 Conduct annual independent research to monitor grower needs and satisfaction with industry services.

3.2 Improve the quality and flows of information for decision-making across the supply chain

3.2.1 Conduct an independent national survey of orchard businesses to establish a reliable baseline data on physical characteristics and farm financial performance to assist investment

decisions in R&D, marketing and policy

3.2.2 Produce an implementation plan to deliver the outcomes of the industry development needs analysis

3.3 Invest in leadership and people development

3.3.1 Prepare development plans to deliver:

(i) greater leadership capacity

(ii) improved skill development across the supply chain

3.3.2 Implement the leadership and skill development plans and promote participation across the supply chain


- 47 -

Both New Horizons 2015 and the IDNA attach a high priority to industry development activities as a means of achieving the industry’s strategic objectives and rolling-out past and future research outcomes. It is, therefore, imperative that this priority investment area receives a much greater emphasis, stronger planning, better coordination and more resources. Improved ways of engaging with growers and supply chain participants and better utilisation of private advisors (input suppliers, agronomists and agri-business consultants) are needed.

The new strategic approach during 2010-2015 will involve a number of complementary priorities.

New Extension Network

There is an urgent need to integrate activities across the different States and the various industry associations into a single network; all aligned to achieve the overall objectives of New Horizons 2015. In addition, IDNA has identified a changing trend in the way growers’ access information to guide their businesses. As State government departments continue their withdrawal as extension providers, growers are increasingly engaging private advisors and others across the supply chain to provide professional advice and support.

Three broad approaches, operating in parallel, need to be addressed under the auspices of a newly-constituted National Coordination Panel which will have broad stakeholder representation. The approaches involve:

1. Reconstituting existing projects. The personnel and relevant activities of the following projects (and any renewals) operating across Australia will be restructured as an integrated whole:

- AP08039 Apple and Pear industry Technical Officer

- AP08027 Facilitating the Development of the Queensland Apple Industry

- MT06067 Technology transfer in the Goulburn Murray pome fruit industries

- AP06020 Facilitating the development of the Western Australian Pome Fruit Industry

- MT07058 Combined FGT, CGA Industry Development Officer

- MT09047 Continued facilitation of the Development of the Tasmanian A&P, cherry and stonefruit industries

DPIV, the largest State Government co-investor in apple and pear RD&E, has established a Horticulture Industry Network (HIN) with its industry partners; this is a possible model for how the re-structure might develop a more collaborative approach. TIAR is also currently reviewing its approach to extension.

2. New engagement with private advisors. The network of extension providers needs to expand beyond those provided by industry associations themselves. Private advisors and supply chain operators need to be more closely encouraged and fostered to engage with the RD&E portfolio. In this way they could provide a more contemporary conduit for the flow of information to industry. How this is achieved needs further analysis but again, DPIV’s planning may provide a model. DPIV is presently actively exploring this approach by creating a Horticulture Service Provider Network (HSPN) as a way to disseminate knowledge and services.

3. Development of extension packages. The new extension network, under the auspices of National Coordination Panel, will be responsible for formulating an on-going industry development program. As a starting point they will examine, in detail, past and present RD&E projects in order to ensure that appropriate extension/technology transfer activities are undertaken. In addition, where major RD&E projects are underway or newly-formulated, it is imperative that an extension component/package is built into the program and interacts with all of its activities; for example as is the case with the current PIPS project (Section 6.1). Two current areas are a priority for the development of contemporary national extension packages in partnership with appropriate technical experts. They are:

i. the roll-out of an Integrated Pest Management (IPM) package utilising the recently produced IPM and Biosecurity Manuals as the focal point. The package will investigate the creation of a web-based IPM tool incorporating a diverse range of information assembled as databases and predictive models.

Integrate and focus… industry development

activities …IDNA


- 48 -

ii. the investigation and adaptation of an irrigation-scheduling package utilising the CSIRO-developed irriGATEWAY server in collaboration with the PIPS project. To facilitate this, a co-investment project with regional water authorities or other bodies as potential funding sources should be investigated.

People and Leadership Development

A frequent theme across the whole of the horticulture industry is the vulnerability that results from not attracting and developing innovators and future leaders. This major area of planning for the future needs of industry has only been addressed in past RD&E portfolio in a limited way, and largely on an ad hoc basis. The following are the only current projects:

- AP06042 Leadership Development: Young Grower Scholarships

- AP07047 Nuffield Farming Scholarship

- AP10007 Study tour to visit European apple tree physiology experts and attend the IHC in Lisbon

The effectiveness of any RD&E program requires a partnership between specialists and practitioners. In addition, these partnerships are most effective when the participants are actively embracing their career objectives and striving towards excellence.

It is proposed to enhance people skills and leadership capacity by formulating a high profile project to encourage and support the participation of keen individuals. The proposal, led by APAL, will develop a three-tiered approach and, at each level, involve both an industry practitioner (selected from growers, supply chain operatives etc) and a RD&E practitioner (selected from science, technology, extension etc) as a pairing. Thus, there would be three pairings targeted at:

1. Tertiary honours student in practical-oriented horticulture & another in horticultural science/research career; their incentive would be in the form of a scholarship to separately (or together if possible) undertake a short study in an area of pioneering interest to the apple and pear industry;

2. Young grower/industry practitioner & junior RD&E researcher/extension worker; selected recipients would be asked to travel together to visit key research establishments, pome fruit growing regions and/or conferences with the view of comprehensively reporting back on key findings and assisting in on-going project formulation on selected subject areas;

3. Senior grower/industry practitioner & senior RD&E project leader; similar to above but with the additional objective of formally representing industry, perhaps in a negotiating role, and being a participant on a relevant industry body or committee.

On-going negotiations to remain an active party in the Nuffield Farming Scholarship will be an additional activity in this activity of people and leadership development.

Another important way to encourage people to engage with the apple and pear industry is through the involvement of tertiary training institutions. A largely un-tapped opportunity exists to lever partnerships and funds with universities to engage students to undertake specified components of individual projects. An example is provided by the embedding of a PhD project within the PIPS program.

Future Orchards - Beyond 2012

“Future Orchards 2012” is a landmark industry development project addressing both apples and pears. Conceived in 2006, the program will complete its second term in October 2010. The overall objective is to provide growers with a pathway to convert their orchards into internationally competitive operations. The concept of this project is to engage grower participants in an on-going and long-term manner focusing on specifically-managed orchard blocks throughout Australia. Activities include close monitoring of blocks in terms of productivity, benchmarking data and performance to world best practice, orchard walks and skills demonstrations.

To date there is considerable positive feedback from growers (e.g. national grower survey undertaken by Ipsos Australia in April 2008) and this will be formally evaluated as an integral part of the project.

Future Orchards 2010 …has been a huge

success…Ipsos

http://irrigateway.net/Default.aspx


- 49 -

The on-going strategy is to thoroughly analyse “Future Orchards 2012” as it nears the end of its term with a view to reconfigure, rejuvenate and relaunch the program as “Future Orchards - Beyond 2012” in late 2010. Any modifications or additions to the program will be formulated by the project management team.

National Conference

In the past APAL have organised an annual national conference. In recent years it has been decided, largely on the basis of declining participation, that holding this event each year is too frequent. In addition, there is an element of competing interests with the annual event that is the AFFCO World Class Workshop/Expo and with any State-based industry conferences that are occasionally held.

Beginning in 2012 the strategy will be to invest in only one national conference held every two years. This event will focus on key elements of New Horizons 2015. It will provide the forum for addressing progress towards meeting the key objectives of industry’s strategic plans and embrace detailed reporting to industry in specific RD&E projects by key personnel. In addition, to complement the program the conference will present influential key note speakers from around the world and be a forum for individuals in the people and leadership development program (see above) to deliver their viewpoint.

It is anticipated that this national conference will be undertaken in partnership with a variety of other bodies where appropriate (e.g. AFFCO, State industry associations, and others). Participating groups will be able to secure their own dedicated sessions or “break-out” groups as needed.

There are compelling reasons to go beyond Australia in seeking a partner to co-host the industry conference. A specific objective would be to target a liaison with Horticulture New Zealand (HortNZ) with a view to holding a combined Australia & New Zealand conference inaugurated no later than 2014 and perhaps held every 4 years.

Industry Data and Analysis

Gathering, analysing and communicating data and information along the supply chain is considered as fundamental to achieve the industry’s strategic plan and has been identified as an area of high priority in both New Horizons 2015 and IDNA. Industry data is useful both directly to growers and indirectly to others as a planning tool for across-industry development (e.g. HAL, APAL, PHA).

There are five recent or current projects in the RD&E portfolio that address this issue, namely:

- AP08055 Apple and Pear industry Data and Analysis

- AP09048 APAL Cool Store Stock Reporting System Concept & Scope

- MT08015 Data Collection Program (continuation from MT07036)

- AP08038 Improved Crop Forecasting

- AP07010 AFFCO Well Informed Grower project - apples and pears

All of these projects have either recently finished or have only a short term to completion. It is clear that elements of the first two projects above have been successful and are valued by industry in terms of the data regarding cool-store stocks. However, other information such as crop production forecasts in particular, is notoriously difficult to assemble, analyse and present to the whole of the apple and pear industry. The Australian Bureau of Statistics (ABS), amongst others, is a key source of information and industry statistics.

It is timely to restructure this work into a much more integrated, streamlined and effective program.

The overriding objective is the need to improve on-farm decisions, both of a strategic and an operational nature. This will require access to contemporary data and analysis that includes the following elements:

1. Crop forecasts by region and tracked throughout the season

2. Cool-store stocks based on varieties


- 50 -

3. Pricing, volumes and sales forecasts across indicative domestic markets including the status of competitive products

4. International developments, particularly of exporting nations

5. Benchmarking against similar domestic and international businesses

The strategy for the 2010-2015 period is to consolidate this work into a single “Apple and pear industry Data and Analysis Program” (IDAP) that itself interacts with parallel programs under investigation in the domestic market and export market programs (as in point 3 and 4 above) which is developed in more detail in their respective 2010-2015 strategic plans (Section 6.5).

Under the leadership of APAL staff an IDAP project development team will immediately explore the appropriate way to structure this program. A key element will be the identification of how and where to access the fundamental data on crop production; from growers themselves or via ABS. There are good prospects to explore this in the context of a “climate/sustainability” theme and on a co-funding model with an industry/government partnership. It will be important to ensure that the cool-store stock initiative remains functional.

Another immediate area of endeavour is the need to out-source a comprehensive industry survey, with strict attention to confidentiality, to assess individual business characteristics (e.g. size, type, scope; varieties grown etc) and financial performance across the apple and pear industry. This study is the prime way in which a baseline of performance across Australia can be established. A parallel activity would include a comparative assessment of international business/grower performance.

IDAP will bring all this data together with appropriate analysis so as to provide information to individual growers on the one hand, and broad-spectrum users on the other, tailored to their different needs.

Industry Communications

Most of the above activities could be considered as industry communications as well as industry development. However, in the context of this RD&E Plan the following activities are presented for completeness; they are also the subject of a more detailed Communications Strategy 2010/2015 that is under parallel development.

There are currently two main projects supporting dedicated industry communications. They are:

- AP08054 Apple and pear industry communications

- MT08043 Australian Fruitgrower Magazine – Apple and Pear, Summerfruit

The majority of apple and pear growers perceive the overall quality of APAL communications as “good” (Ipsos Australia, grower survey 2008). However, there are mixed reactions to the usefulness, quality and extent of the different communication methods utilised between APAL, the RD&E program and the industry at large. Projects such as “Future Orchards 2010” with dedicated built-in grower contact are receiving strong feedback with regard to the level of communications. The traditional methods of general information flow via magazines, articles and now the APAL web-site have variable support. The web-site in particular appears to have a very low profile with most growers even though grower-directed articles and information can be readily accessed from that site.

The strategy to refresh the approach to industry communications will involve an immediate independent survey of growers throughout the industry. The intent of the survey is to assess the grower needs and satisfaction with the provision of industry services. Results from this analysis will then be used to adapt the channels and content of industry communications to fulfil expectations. It is proposed that follow-up surveys will be instigated in order to monitor the success and effectiveness of future communication activities.

APAL communications are rated highly…by

growers…Ipsos


- 51 -

6.6.4 Key performance indicators – Industry Development


The majority (>75%) of targeted apple and pear growers should rate all industry development activities highly and positively when their feedback is sought or reviewed

An extension network should be active and broadly utilised

Future Orchards should have a comprehensive plan of its on-going role and of the next generation of activities and be undertaken with a high level of grower support and interaction

IDAP will be the mainstay of the apple and pear industry’s information sources and statistics

6.7 Portfolio Management


The apple and pear industry RD&E portfolio is managed by a HAL Industry Services Manager working closely with the IAC. HAL’s Board receives recommendations on investment in each project from the IAC. In the past, the selection of RD&E projects for funding support is largely based on responses to a call for submissions. The IAC’s RD&E Sub-Committee, in partnership with HAL’s Portfolio Managers, assess potential projects against annually-updated priorities linked to the objectives of the current strategic plan.

The formulation and release of the apple and pear industry strategic plan New Horizons 2015 in March 2010 has re-set the agenda. In that plan the role of RD&E is considered critical in enabling industry to meet its existing and emerging challenges. In response, it is timely to re-analyse the approach taken to formulate and operate the apple and pear RD&E portfolio.


The on-going and day-to-day costs of managing the RD&E portfolio are met by HAL (utilising levy funding) and by APAL. In addition, a number of investments in individual projects have been made to improve knowledge capabilities and to aid planning activities, largely on an issue-by-issue basis. There are eight recent and current RD&E projects that are broadly grouped into 2 categories:

1. Investigating capabilities

- AP07021 FO2012 study tour Europe Jun 2008

- AP08047 Current research and growing techniques in Europe

- AP08051 Fireblight issues in Europe

- AP08053 Review of R&D capabilities in NZ

2. Planning and reviewing

- AP08059 Strategic Planning and Industry Development Needs Assessment for the Australian Apple and Pear Industry

- AP08046 Development of a 5 year Business Plan for a National Apple and Pear Productivity R&D Program

- AP09023 Industry Projects Return on Investment BCA (pending)

- AP09030 Strategic plan outcome projects

6.7.3 New strategy 2010-2015 – Portfolio Management

The principles and issues considered in re-focussing the RD&E program have been outlined in Section 5; broadly speaking they highlight the need for a more dynamic and comprehensive approach to managing the portfolio. The activities involved in the on-going management and formulation of the RD&E plan, like the projects within the portfolio themselves, need to be better integrated and more strategic.


- 52 -

The following activities, managed by the RD&E Sub-Committee, will be brought together in an integrated project entitled: “Pro-active management of the RD&E portfolio”:

on-going priority setting, project and program development and evaluation of project submissions

dedicated monitoring of individual projects within each priority area; including a program of “in-field” project reviews of current projects where it is considered practical and worthwhile

exploring and strategically analysing partner capabilities and potential opportunities in conjunction with the National Horticulture Research Framework

understanding the issues and dynamics of overseas apple and pear industries and RD&E establishments and programs

pro-actively interacting with RD&E co-investors, particularly by dedicated involvement in project development and project management activities

program and project evaluation to be embedded within the planning cycle, including post-implementation evaluation of selected individual projects or sub-sets of larger programs as well as pre-implementation assessments of potential projects (to include Benefit/Cost analysis as prescribed by Council of Rural Research & Development Corporations' Chairs (CRRDCC) Guidelines)

Integration of these activities into a single project represents a step-change in the operations of the program and will require a significant additional body of work and commitment. To be fully operational, it is estimated that an on-going annual funding allocation (perhaps up to 10% of the total annual RD&E portfolio budget) will be needed to fulfil this function. Importantly, in undertaking this function the management roles of HAL and the RD&E providers themselves must be taken into account to avoid any potential for duplication or uncertainty.

6.7.4 Key performance indicators – Portfolio Management


The operational aspects of planning, implementation and evaluation of the RD&E portfolio will be regarded as highly professional and understood by surveyed stakeholders

A suite of new projects will have been commissioned or developed under the guidelines and approaches outlined in this plan

The evaluation of performance of the overall RD&E plan will have been critically reviewed with a positive outcome; performance indicators for each investment priority area will be assessed in this review process

A new five year RD&E plan will be developed and approved based on the present plan and accommodating the review findings


- 53 -

7. Indicative Budgets and Risks

7.1 Indicative budget and allocation targets

There are a number of key features of the budget starting point for the 2010/11 financial year when it is allocated according to the new priority investment areas described previously (FIGURE 6).

Firstly, the overall allocation of about $6.6m is greatly influenced by the onset of the large PIPS project (see Section 6.1 Productivity & Supply Chain) and the start-up funds for the extension of the PrevarTM project (see Section 6.3 Germplasm Improvement). These two projects dominate the RD&E portfolio largely due to the high investment (as voluntary contributions) by New Zealand’s PFR alongside a much smaller co-investment of levy funds.

The second key element of the starting budget is the high level of unallocated funds (14% or $0.94m). These funds have been deliberately kept aside to await the development of this RD&E plan in order to better guide the on-going investment.

The last notable feature of the starting budget is the absence of any current allocation into the Climate Change priority area (although some aspects are covered in the PIPS project) and the absence of any voluntary contributions into the more across-industry and “public-good” areas of both Market Access & Biosecurity and of Market Research.

FIGURE 6 - 2010/11 Opening allocation into investment areas

(Total $6.6m; Levy $3.3m; VC $3.3m)

0

500,000

1,000,000

1,500,000

2,000,000

2,500,000

3,000,000

6.1 Pro

d & S

upply Chain

6.2 Clim

ate Change

6.3 Germ

plasm Impro

vement

6.4 Market A

ccess & B

iosecurity

6.5 Market R

esearch

6.6 Industry

Development

6.7 Portf

olio M

anagement

U

nallocated

Allo

ca

tio

n (

$)

20%

8%

27%

10%

4%2%

3%

7%5%

14%

0%

VC = Upper, dotted

Lev y = Bottom, solid colour


- 54 -

In the 2011/12 financial year it is anticipated that the overall available funds will increase to $6.8m due to a targeted increase in voluntary contributions despite a small reduction in levy funds (FIGURE 7).

An increased investment into the Productivity & Supply Chain area is expected largely through expanding the PIPS project and staging the introduction of a new supply chain study (Section 6.1.3).

An allocation of 3% of the budget from levy funds will be targeted at a new integrated project in Climate Change (Section 6.2.3).

The large allocation into Germplasm Improvement will remain at about the same level as the previous year. A proportion of levy funds will be needed to accommodate transitional changes in the pear breeding and germplasm repository activities (6.3.3).

The allocation of levy funds invested in Market Access & Biosecurity (Section 6.4.3) is the same as the previous year. Similarly, the Market Research (Section 6.5.3) allocation is comparable with the previous year but an emphasis on developing export market intelligence allows the scope to lever additional voluntary contributions.

The Industry Development levy allocation will be substantially increased to represent 11% of the overall budget. The forecast challenges outlined in Section 6.6.3 largely require a re-alignment and integration of industry development activities to gain efficiencies and increased focus. It is planned to re-launch the Future Orchards 2012 project utilising a similar level of funding as in previous years.

A bigger allocation, representing 8% of the forecast budget, has been targeted for Portfolio Management (Section 6.7.3). These funds are especially important in the early years of this RD&E plan as they are intended to be invested in the strategic analysis of a number of new projects areas. These new projects will, in turn, be expected to identify appropriate funding sources and co-investment opportunities.

The on-going allocation in subsequent years beyond 2012 is anticipated to remain in similar proportions to that in 2011/12.

FIGURE 7 - 2011/12 Allocation target into investment areas

(Total $6.8m; Levy $3.1m; VC $3.7m)

0

500,000

1,000,000

1,500,000

2,000,000

2,500,000

3,000,000

6.1 Pro

d & S

upply Chain

6.2 Clim

ate Change

6.3 Germ

plasm Impro

vement

6.4 Market A

ccess & B

iosecurity

6.5 Market R

esearch

6.6 Industry

Development

6.7 Portf

olio M

anagement

Unallo

cated

Allo

ca

tio

n (

$)

24%

12%

26%

9% 4% 1%

3%

11% 7%

1%

1%

3% 0%

VC = Upper, dotted

Lev y = Bottom, solid colour


- 55 -

7.2 On-going budgets

After the 2010/11 financial year it is expected that RD&E levy funds will decline. It is difficult to precisely forecast the scale of any reduction in levies over the time frame of this plan; without doubt it will occur in proportion to the impact that imported fruit has on Australian production. Any reduction in Australian-grown fruit production results in a concomitant decline in available RD&E levy funds.

In many projects levy funds are used to lever additional contributions so it is anticipated that it will be difficult to maintain the overall budget at 2011/12 levels. The challenge will be to keep the level of voluntary contributions at high levels, perhaps by encouraging new private sector and/or international institutions to co-invest in the program.

The overall forecasted budget for each financial year until 2015 is shown in TABLE 8.

TABLE 8 – Indicative annual fund availability between 2010 & 2015

2010/11 2011/12 2012/13 2013/14 2014/15

Levy $3.3m $3.1m $3.0m $2.8m $2.6m

Voluntary Contribution $3.3m $3.7m $3.6m $3.5m $3.5m

Total $6.6m $6.8m $6.6m $6.3m $6.1m

The IAC RD&E Sub-Committee has the role to monitor and manage the budget to ensure the appropriate and equitable allocation of funds into key priority areas. An area of challenge for this Sub-Committee is to scrutinize the overall budget projections and help identify alternative sources for co-investment into the RD&E program including international and additional Australian Government funds.

7.3 Potential risks

This RD&E Investment Plan has been developed to help the apple and pear industry address those anticipated challenges outlined in New Horizons 2015.

However, within the next five year period, some changes are expected in the structure of the industry. It is anticipated that the number of individual growers will fall and the industry could contract by between 20 and 40% by 2015. This diminution is largely contingent upon the threat of imports and the competition from other food types on the domestic market. Given that the resources available for RD&E are largely dependent on, and levered from, the grower levy (see Section 4.2.2 & 4.2.3), any reduction in overall production will invariably reduce this source of funds.

In addition, the present arrangements operating through the Australian Government and HAL model are currently under review by the Government-sponsored Productivity Commission into Rural Research and Development Corporations (announced February 2010; to be finalised in February 2011).

Amongst other things, this inquiry will examine the:

rationale for Commonwealth Government investment in rural research and development

appropriateness of current funding levels and arrangements - particularly levy arrangements, and matching Commonwealth contributions

extent to which Rural Research and Development Corporations (RRDC) funded projects provide for an appropriate balance between industry-specific and broader community benefits

effectiveness of the RRDC model in enhancing the competitiveness and productivity of Australia's rural industries

scope for improvements to the RRDC model - and any alternative models that could deliver better outcomes

http://www.pc.gov.au/projects/inquiry/rural-research

http://www.pc.gov.au/projects/inquiry/rural-research


- 56 -

Any change to the matching fund arrangements for either grower levied funds or voluntary contributions would be expected to have a major impact on the strategic approach to the development and operations of the forecast RD&E portfolio.

A major expansion of the industry into export markets is a present challenge facing industry. A number of elements have been built into this RD&E plan in order to promote the development of this export activity. However, increasing production dedicated for export is highly dependent on a judgement by individual businesses of the profitability of this venture. After meeting efficient production cost targets, perhaps the major factor influencing profitability is the international exchange rate of the Australian dollar. The current rates and trends in the first half of 2010 are setting a high barrier to entry into the export arena. At this time, future trends are not considered to become any more favourable.

On-going risks for the apple and pear industry entail the nature of growing fruit and the availability and cost of inputs. Notwithstanding, the impact of climate (particularly extreme heat events and drought) the availability of irrigation water at a reasonable price is a constant concern. Of particular note are the expected significantly reduced water allocations to be outlined in the Proposed Basin Plan from the Murray-Darling Basin Authority to be released in August 2010.

The availability and dedication to the horticulture industry of a critical mass of experienced research and extension staff is a constant and increasing risk. State Government agencies that provide RD&E support are increasingly engaged in restructuring their priorities and resource allocations. This plan attempts to offset this risk by working closely with NHRN to ensure longer-term shared commitments and also by embracing other research providers, particularly those from universities and overseas agencies.

Although not exhaustive, any one of the risks outlined above could have a major impact on industry and thereby influence the successful delivery of the RD&E program outlined in this plan. Thus, it is envisaged that this plan is a “living document” and may need to be amended and supplemented at times throughout the five year period between 2010 and 2015.

http://www.mdba.gov.au/basin_plan


- 57 -

8. References

8.1 Acronyms & abbreviations ABS Australian Bureau of Statistics

ACIAR Australian Centre for International Agricultural Research

AFFCO Australian Fresh Fruit Company

APAL Apple & Pear Australia Ltd

APFIP Australian Pome Fruit Improvement Program Ltd

CCRSPI National Climate Change Research Strategy for Primary Industries

CRCNPB Cooperative Research Centre for National Plant Biosecurity

CRRDCC Council of Rural Research & Development Corporations' Chairs

CSIRO Commonwealth Scientific and Industrial Research Organisation

DAFF Department of Agriculture, Fisheries and Forestry

DAFWA Department of Agriculture and Food Western Australia

DIISR Department of Innovation, Industry, Science and Research

DPIV Department of Primary Industries Victoria

FSANZ Food Standards Australia & New Zealand

GMOs Genetically modified organisms

HAL Horticulture Australia Limited

HIN Horticulture Industry Network

HMAC Horticultural Market Access Committee

HortNZ Horticulture New Zealand

HSPN Horticulture Service Provider Network

IAC Apple and Pear Industry Advisory Committee

IDAP Apple and Pear Industry Data and Analysis Program

IDNA Apple and Pear Industry Development Needs Analysis

IINSW Industry & Investment NSW

IPM Integrated Pest Management

LCA Life Cycle Analysis

MARRS Mechanisation, Automation, Robotics and Remote Sensing

NHRN National Horticultural Research Network

OHMA Office of Horticultural Market Access

PHA Plant Health Australia

PFR Plant & Food Research, New Zealand

PIMC Primary Industries Ministerial Council

PIPS Productivity, Irrigation, Pests & Soils project

PIRSA Primary Industries and Resources, South Australia

PISC Primary Industries Standing Committee

QDEEDI Queensland Department of Employment, Economic Development and Innovation

R&D Research & Development

RD&E Research, Development & Extension

RRDC Rural Research and Development Corporations

RIRDC Rural Industries Research & Development Corporation

SARDI South Australian Research and Development Institute

t/Ha Tonnes per hectare

TIAR Tasmanian Institute of Agricultural Research

TTT Tree to Table: Sustainable Supply Chain Analysis for Apples and Pears project

VC Voluntary Contributions

VCA Value Chain Analysis

VIP Apple and Pear Variety Improvement Program


- 58 -

8.2 Key documents APAL Communication Strategy 2008-2011

Apple & Pear Breeding/Variety Development- Discussion Framework (Marian Sheehan, HAL)

Apple & Pear Industry Report 08-09 (APAL/HAL)

Apple & Pear project database 2009/10 (HAL)

Apple and Pear Industry Development Needs Assessment (Inovact Consulting/APAL)

Attitudes of UK supermarket shoppers towards wine purchasing (Andrew Fearne)

Australian Apple and Pear R&D Capability (Bradley Mills, HAL)

Horticulture Australia Limited Strategic Plan 2010-2015 (draft)

Horticulture Climate Change Action Plan (HAL)

Horticulture's Climate RD&E Matrix (Alison Turnbull, HAL)

Investment of levies for Australian Horticultural Industries (HAL)

Market Access R&D Plan 2009 (HAL)

National RD&E Framework for Horticulture (NHRN)

New Horizons 2015 - apple and pear industry Plan (APAL)

Options for Access to New Genetic Material for Australian Apple and Pear Growers – Business Case (APAL/HAL)

Rural Research and Development Priorities (DAFF)

Sustainable Value Chain Analysis: A Case Study of South Australian Wine (Andrew Fearne)

What you said about: APAL communications, the Future Orchards 2012 Program & Your orchards (Ipsos Australia)

World Apple Review - 2008 Edition (Belrose Inc.)

8.3 Key contacts Lawrence Bonney

John Chapman

Dugald Close

Rob Duthie

Annie Farrow

Ian Goodwin

Bob Granger

Stuart Gray

Richard Hawkes

Kim James

Jason Jarvis

John Karl

Matthew Lenne

Garry Langford

John Lawrenson

Rowan Little

John Magarey

Bradley Mills

Chris Peters

Tony Russell

Kevin Sanders

Lester Snare

Michael Stafford

Michelle Toft

Ugo Tomasel

Alison Turnbull

David Williams

Apple Pear Industry - apal.org.auapal.org.au/wp-content/uploads/2014/10/Apple-and-pear-industry... · Research, Development & Extension Investment Plan 2010-2015 “Innovation making

Documents